Following Yorkshire Agricultural Society’s (YAS) recent win at the Upper Tribunal (UT) in January 2025, HMRC have now confirmed that they will not be seeking to appeal the decision.
This decision reaffirms the good news for all fundraising charities that in the right circumstances they can retain the entire proceeds earned from fundraising events that raising essential funds for their charitable objectives.
The dispute originally concerned the VAT liability of income generated from an annual event, the 2016 Great Yorkshire Show. The fundraising exemption for VAT sets out three conditions for the exemption to apply to the supply of goods and services by a charity in connection with an event:
- “That is organised for charitable purposes by a charity or jointly by more than one charity,
- Whose primary purpose is the raising of money, and
- That is promoted as being primarily for the raising of money.”
(Item 1, Group 12, Schedule 9, VAT Act 1994)
HMRC disputed condition b) and c). Despite their initial grounds in disputing condition b), HMRC accepted the UT findings that there could be more than one primary purpose and that the show had two - fundraising and education.
With regards to condition c), HMRC argued that it imposed a strict evidential requirement on YAS. Since it failed condition c), the exemption could not apply, and YAS was liable for VAT on all income earned from the Show.
Not for Profit
Read more about Not for ProfitRead moreSignificantly, the UT disagreed with the structure of UK law and held that condition c) had no basis in EU law. As this dispute relates to supplies made pre-Brexit, UK VAT law must be read in conformity with the overriding EU VAT Directive.
Going forward the VAT exemption will be applicable under the following conditions:
- The fundraising event aligns with the charity's main objectives.
- Fundraising is one of the charity's core aims.
- Marketing materials clearly indicate that the primary intention is to raise funds.
YAS's win at the UT offers charities a solid foundation for future planning and the opportunity to reclaim VAT that was paid on income from fundraising events in the last 4 years that can now be treated as exempt from VAT.
For more information or help with a VAT claim, please contact Michael Samuel-Bryan [email protected].
