NHS bodies or their charitable trustees often embark upon fundraising events. The VAT treatment of these events is an area which can often cause confusion and there are some circumstances where VAT exemption is appropriate for supplies but this is not always the case.
Generally, VAT exemption only applies to those events which are promoted as being held primarily to raise funds. The exemption does not extend to regular trading activities but covers a variety of events such as a ball, annual lunch or dinner dance, etc. For example, an event of the same kind held 15 times or more in a year in the same location does not qualify for VAT exemption.
Charity ‘challenge’ events such as walking, cycling and other sponsored events to raise funds are likely to be affected by recent changes announced by HMRC. The types of events which are affected include those which are arranged to include travel and accommodation and require the participants to raise a minimum figure in order to participate. Although the changes took place on 31 July 2008, where events have been publicised or contracts have been entered into before this date the old rules should still apply.
Fund raising events that include a package of both travel and accommodation or more than 2 night’s accommodation do not qualify for the fund-raising exemption and are therefore subject to VAT.
Please contact us for further details if you think that this affects your NHS body.