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VAT on Chairty ball tickets

Should VAT be charged on tickets to charity ball

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My client, a registered VAT business, is looking to organise and host a charity ball for a local children's hospital (which treated their child when they were younger).  The business will cover the costs of the ball and money raised from any ticket sales will be donated to the charity.  My question is how do we treat the VAT?  My first assumption is that the tickets for the event will need to be standard rated, as they provide a direct benefit to the purchaser, however, is there some exemption in respect of these being in aid of charity, or are the exemptions only available when the actual charity organises the event? And then also, can the business reclaim the VAT on the associated costs.  

Thanks for any guidance provided.  Unfortunately, I'm not familiar with VAT associated with charity events and have looked through the guidance, but wanted to clarify.  

Replies (4)

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By MJShone
13th Sep 2019 11:54

Yes - your client needs to charge VAT and can recover the input VAT. Your client will need to be careful about how they advertise it - if attendees expect the ticket price to go to charity, it could end up costing your client the equivalent of the VAT.
You could look at other ways of doing it eg asking for donations, with a suggested amount. (You can't have a set amount.) That might raise more money because people might give more than the suggested amount. However, your client wouldn't be able to recover the input VAT.
Others will no doubt have better ideas!

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Replying to MJShone:
By WhichTyler
14th Sep 2019 08:52

I agree with what MJ shone said. Also be aware that buying a ticket is not eligible for gift aid or ct relief and the charity can't benefit from GA either.

This is why events like this (even when organised directly be the charity) are quite inefficient unless you take every opportunity to 'upsell' additional direct donations (Maybe a matching challenge or silent auction at the event), recruit new major or regular donors to the charity, raise awareness of the charity's work, etc.

It might be worth them talking to the charity to see what they advise, eg

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Mike Cooper HJS
By mike_uk_1983
16th Sep 2019 09:26

Wouldn't it be better for your client to speak with the charity and charity run the ball so no VAT on the tickets or suggested donation to attend. Then your client could donate their time and company's resources to organise it for them.

Thanks (2)
By Jan CM
17th Sep 2019 13:48

Thanks all for your responses, all very useful and in line with my initial expectations.

Much appreciated.

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