VAT on fundraising events of non-profit making bodies

KEY POINTS

• The exemption on fundraising income is available to charities and non-profit making bodies.
• Events must meet three conditions to qualify for exemption.
• Maximising input tax recovery on event costs.
• Functions must not be in competition with similar ones organised by commercial businesses.

I never went to university and joined Customs and Excise as a VAT officer in my teens. So when I read the First-tier Tribunal decision in Loughborough Students’ Union and others (TC6571) about the VAT liability of income received from functions such as Monsters Balls Keele’s Flirt Hey Ewe and Mega Monday organised by four students’ unions that were all charities I was baffled.

But the key issue was whether this exciting range of social functions qualified for VAT exemption on ticket sales as fundraising events organised by...