Tax

On 13 June 2025, HM Revenue and Customs (“HMRC”) published a Revenue and Customs Brief (the “Brief”) which sets out HMRC’s position on the VAT exemption for fundraising events following the Upper Tribunal (“UT”|) judgment in The Commissioners for HM Revenue and Customs v Yorkshire Agricultural Society [2025] UKUT 00004 (TCC).

Background

Under UK VAT rules a supply of goods and services by a charity will be exempt from VAT where such supply is made in connection with an event: (a) that is organised for charitable purposes by a charity (or jointly by more than one charity); (b) whose primary purpose is the raising of money; and (c) that is promoted as being primarily for the raising of money (the “Fundraising Exemption”). There is an equivalent exemption for supplies made by “qualifying bodies” in the course of such events. There are various other conditions that must be met for the Fundraising Exemption to apply which are not addressed in this Weil Tax Blog.

The Commissioners for HM Revenue and Customs v Yorkshire Agricultural Society

The Yorkshire Agricultural Society (“YAS”) is a registered charity which organises and runs the Great Yorkshire Show, an annual agricultural show (the “Show”). The matter in dispute between HMRC and YAS was whether the admission charges to the Show fell within the scope of the Fundraising Exemption.

The First Tier Tribunal (“FTT”) found in favour of YSC. HMRC appealed the decision to the UT.

HMRC argued that the Fundraising Exemption did not apply to admission fees for the Show on the basis that:

• the event was not organised primarily for the purpose of fundraising given that the Show was also being organised for educational purposes; and
• the Show had not been promoted as primarily raising money for the YAS.

The UT held that a fundraising event can have more than one primary purpose provided that one of those primary purposes is the raising of money to benefit the charity. On this basis, the Show was considered to be organised for the primary purpose of fundraising even though it had been run for other primary purposes.

The UT also found that the condition that the event must be promoted as being primarily for the raising of money for the charity was incompatible with the EU Principal VAT Directive. As a result of the inconsistency between the European legislation and UK law, the UT held that although the event must be promoted as a fundraising event, it does not need to be primarily promoted as such.

HMRC’s Response

HMRC has not appealed the judgment of the UT and has accepted that a fundraising event can have more than one primary purpose provided that the charity can clearly demonstrate that the different purposes are so interlinked they cannot be separated in importance. The charity will need to show that the event was organised as a fundraising event, and not that there was merely an intention to generate income from the event that was carried on for other purposes.

HMRC also accepts that whilst an event must be advertised and promoted as a fundraising event, the charity need not advertise the event as being for the primary purpose of fundraising.

Following the UT judgment, HMRC has also updated its VAT Notice “How VAT affects charities”, and VAT guidance “Fundraising events: exemption for charities and other qualifying bodies”.

Comments

The UT judgment in this case provides useful clarity on the scope of the Fundraising Exemption. However, in light of HMRC’s response, it is clear that the evidential bar is set high where there are two primary purposes.

Where an event is being organised with multiple purposes, for the Fundraising Exemption to apply, the charity will need to provide clear evidence that fundraising was either:

• the clear primary purpose for organising the event; or
• one of the primary purposes and that the purposes are so interlinked that they cannot be separated in importance.

Further, charities will need to provide clear documentary evidence that the event was organised and promoted as a fundraising event (and not that there was simply an intention to obtain income from it).