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Charity Fundraising Events and VAT

Registration fees and VAT for charity events

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I have just taken over the VAT for a charity who does fundraising events both sporting (eg darts tournaments, sponsored walks, golf days) and non sporting (eg ladies lunch, afternoon teas etc).  I have been informed that if they charge a registration fee to take part in the event (not including a donation or sponsorship money), than it is standard rate for sporting events and exempt for non sporting events.

Can anyone confirm if this is correct?  I am finding contradicting information on HMRC website.  Any help would be really appreciated.

Thank you!

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By paul.benny
15th Jul 2019 17:14

You might want to look at Notice 701/1.

Paragraph 5.9.2 specifically deals with fund-raising events, although I'd read the whole Notice.

Notice 701/45 deals with sporting events. I read the Notice as primarily concerned with sporting events as an activity in their own right and not as fund-raisers for some other cause (see in particular s4, dealing with eligible bodies). I don't think your charity is in scope of this Notice.

I suggest you need to form a judgement based on the specific facts of your charity and the events run. I'm not convinced by the division into sporting- standard-rated/other - exempt. By all means come back with your judgement and rationale.

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By Cart
15th Jul 2019 18:45

Thank you Paul. From reading 5.9.3 a registration fee is standard rate if it is a sponsored event (eg sponsored swim or walk ). They are not commercially organised but an entry fee is payable before participation and there is no limit on the amount you have to raise. But under 5.9.2 it's states that admission fees are exempt were the event is to raise money for the charity. This is were I find the guidance misleading. So is an entry fee different to an admission fee? Then when you look at Charity Fundraising Event exemptions paragraph 3.3 it states sponsored events like swims are exempt and 4.7 mentions admission charges being exempt. Do you think I am misinterpreting the guidance? Thanks in advance

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Replying to Cart:
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By WhichTyler
15th Jul 2019 23:26

First of all, us the charity organising and promoting the event itself? If so does it meet the criteria to be an exempt event? If so then it's exempt.

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By Cart
16th Jul 2019 08:27

Yes it is promoting and organising it. So even though 5.9.3 states standard rate for sponsored events go with exempt because it also fits into 5.9.2?

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Replying to Cart:
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By WhichTyler
16th Jul 2019 09:06

You might be focussing on the word 'sponsored' in the para heading rather than what the para actually says

5.9.3 says

If a charity is organising and promoting the event it may be able to take advantage of the fundraising exemption...The charity can use the fundraising exemption as long as the event it is organising meets the conditions set out in Charity fundraising events: exemptions

Later it talks about 'commercially organised' (so not 'organised and promoted by the charity') sports events, that the charity might benefit from. If this isn't one of those, then why worry?

But don't forget to budget for the irrecoverable input VAT on any costs of staging the event...

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Replying to Cart:
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By paul.benny
16th Jul 2019 09:00

"Admission fees" get you through the door;
"Entry fees" allow you to participate in an event- such as running in a marathon.

5.9.3 seems reasonably clear that if you charge entry fees to participants it's a standard-rated supply (paragraph third before end). So, holding a golf day and charging people £30 a time is likely to be a taxable entry fee. Hiring a golf course and charging people £30 to go through the gate is more like an exempt admission fee.

Confusing? A bit. The helpsheet linked from the Notice mentions not competing with commercially-organised events. That idea may help understand/explain the subtle differences. (note para 3.3 merely rehearses the types of event that may be held for fundraising. Notwithstanding the heading, it doesn't say they are necessarily Exempt).

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Replying to paul.benny:
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By WhichTyler
16th Jul 2019 15:52

Quote:

"Admission fees" get you through the door;

So, holding a golf day and charging people £30 a time is likely to be a taxable entry fee. H.

Sorry but I disagree with this. If it meets the criteria of an exempt fundraising event, all the associated income (ticket sales, entry fees, programme sales, sponsorship) is exempt

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chips_at_mattersey
By Les Howard
16th Jul 2019 09:23

Or, ask the charity whether they want to pay VAT.
Assuming they don't what do they need to do to bring themselves within the exemption?

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