HM Revenue and Customs Brief 36/08
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Issued 6 August 2008
VAT Treatment of Charity Challenge Events
This Brief announces HMRC’s revised guidance on Charity Challenge Events,
including those that qualify for the VAT Charity Fundraising Exemption.
Background
Many charities use Charity Challenge Events, for example running, walking and
cycling events, to raise funds through sponsorship of the individuals who take
part.
Following representations from the charity sector HMRC have been working with
the sector to produce revised guidance to assist charities to determine the
correct VAT liability of such events.
The changes
HMRC has now produced revised guidance with examples and a flowchart to be
used with the guidance. The revised guidance is included as updates to Notice
701/1 Charities and Notice CWL4 Fund-raising events: Exemption for charities and
other qualifying bodies.
Update 1 to CWL4 revises the existing guidance in Section 3.15 of that Notice
and cross-refers to the more detailed guidance now included as Update 2 to
Notice 701/1 that introduces a revised section 5.9.4, cross-referenced to a new
section 10 of that Notice.
Transitional provisions
The guidance will have effect from 31 July 2008. However, HMRC is aware that
some charities are likely to have signed contracts sometime before the events
are due to take place. HMRC therefore accepts that where a contract for an event
has been signed or negotiation with suppliers has started or the event has been
publicised prior to the publication of the new guidance, charities can account
for VAT using their previous procedures.
Claims
Charities may wish to revisit their previous records and make claims for VAT
incorrectly treated in respect of previous contracts.
More information about making claims can be found in
VAT Notice 700/45 How to correct VAT errors or make adjustments or claims
and Business Brief 28/04.
Further information
For further information and advice, please contact HMRC Charities Helpline on
0845 302 0203.
© Crown Copyright 2008.
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