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HM Revenue and Customs Brief 36/08

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HM Revenue and Customs -Tax Authorities

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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.


About the Author

© Crown Copyright 2008.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.



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Article Published/Sorted/Amended on Scopulus 2008-08-18 10:24:41 in Tax Articles

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