The Value Added Tax (Fund-Raising Events by Charities and Other Qualifying Bodies) Order 2000

Explanatory Note

(This note is not part of the Order)

This Order, which comes into force on 1st April 2000, substitutes a new Group 12 of Schedule 9 to the Value Added Tax Act 1994 (c. 23) (exemption for fund-raising events by charities and other qualifying bodies).

Article 3 substitutes the new Group 12.

Items 1 to 3 of the new Group 12 replace the former items 1 and 2 and Note (1) so exemption applies to the supply of goods and services in connection with any fund-raising event which is organised and promoted primarily to raise money for charities and qualifying bodies.

Note (1) applies the exemption to fund-raising events where participation is by means of electronic communications such as the Internet.

Note (2) extends the relief to a wholly owned subsidiary of a charity holding fund-raising events provided all its profits are payable to a charity.

Note (3) defines “qualifying body” to provide exemption for events organised by certain sports, cultural, trade union, professional and other public interest bodies.

Note (4) provides VAT exemption for fund-raising events held by a charity or a qualifying body provided that no more than 15 events of the same kind are held in any one location during the financial year of a charity or qualifying body.

Note (5) preserves VAT exemption for small scale events held by a charity or a qualifying body, such as jumble sales and coffee mornings, provided the gross weekly takings do not exceed £1,000.

Note (6) calculates the number of events which may be exempted in a financial year which is longer or shorter than 12 months.

Note (7) ensures that every event a charity or a qualifying body organises, whether alone or in association with another charity or qualifying body, counts towards the limit of 15.

Notes (8) and (9) provide for events incorporating up to two nights incidental accommodation to be exempt. Note (9) confirms that any supply which falls within the Tour Operators' Margin Scheme (for businesses that buy in and resell travel, hotel, holiday and certain other services to travellers) is excluded from the exemption for fund-raising events.

Note (10) treats a charity and its wholly owned subsidiaries as a single body for the purposes of the tests in Notes (7)(a) and (8).

Note (11) removes from exemption an event which is likely to create distortion of competition and place a commercial enterprise at a disadvantage.

Article 4 makes a consequential amendment to a previous Order.