I'm organising a ball to raise funds for my charity, but VAT is giving me a real headache. Can you help? Actually, you might not have to worry about VAT at all.
Really? Why's that? Money raised from a 'one-off' fundraising event is exempt from VAT. This includes income from admission charges, goods sold at the event, and sponsorship.
Well, that doesn't help me - we were planning to have both a spring ball and one in the autumn, too - both at the same place. Customs and Excise's definition of 'one-off' is different from most. This means that you can hold 15 events of the same kind in the same location in any financial year and still be exempt from VAT. But as soon as you hold 16 events of the same kind in the same location, then you have to pay VAT on all of the income from all of the events.
Great. Anything else I should know? You must make sure that you advertise that the event is a fundraiser on all of the publicity material. The event can be anything from a ball, a performance or a fete to an exhibition, jumble sale, sponsored run or firework display. And bear in mind that this list is not exhaustive.
What about if we organise an event with another charity? The exemption applies to any event organised by a qualifying body, such as a charity, non-profit-making club or cultural body, but not commercial companies, even if they plan to donate all the money raised to charity.
What happens if we have to provide accommodation? Make sure that any accommodation provided does not exceed two nights in total. You will need to follow the regulations of the Tour Operator's Margin Scheme. If in any doubt, contact your local Customs and Excise or Inland Revenue office.
For further information Customs and Excise and the Inland Revenue have jointly produced a guide - 'Fundraising Events: Exemption for Charities and Other Qualifying Bodies'. There is a link to it on the Institute's website in the 'Information about Fundraising' section, under 'Information About Tax Effective Giving and VAT'.
The Institute invites readers to email questions for inclusion to firstname.lastname@example.org.