Freshers’ events held for social or fundraising purposes?

The students’ union held several events for freshers’ week. Some of the flyers contained wording to the effect that the events were to raise funds for the union’s charitable purpose. It claimed that as such the income was VAT exempt (VATA 1994 Sch 9 group 12 item 1).

The income received from a fundraising event organised by a charity or not-for-profit body is exempt from VAT if some conditions are met. For example its primary purpose must be to raise funds and it must also be promoted as a fundraiser through tickets websites and in meeting minutes.

HMRC refused and the taxpayer appealed.

The First-tier Tribunal said the matter depended on whether events organised by the union were primarily intended to raise funds or were social events for the students - an opportunity for fresher students to settle into university life and make new friends. There was some confusion...