Charity Challenge Events – are they exempt fund-raising events?
H M Revenue & Customs have just released Revenue & Customs Brief 36/08 which points to two Notices in which HMRC have recently updated the guidance on this area. These are Notice CWL4: Fund-raising events: Exemption for charities and other qualifying bodies; and Notice 701/1: Charities which are on HMRC’s website. The links are to PDF versions of the Notices – the latter of which is only available as a PDF.
The answer to the question is, of course: possibly.
There is a flow chart in the update included with the Charity Notice (701/1) that can be used to help determine whether the event being organised will fall within the exemption.
The first question to consider is whether the participants have to make a payment to take part in the event. If they do, consideration has to be given as to whether the event includes bought in accommodation, or a package of travel and accommodation. If it does and the charity is acting as principal or undisclosed agent the event will fall into the Tour Operators Margin Scheme (TOMS).
If the event doesn’t fall within TOMS but the charity provides from its own resources more than two nights accommodation, the event will not be exempt. If the charity is acting as a disclosed agent and receives commission that will be liable to VAT at the standard rate (currently 17.5%).
Don’t rely on this précis of the guidance, please check out both Notices for more details.
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