Is VAT chargeable on charity supporters' schemes?
Charities running supporters schemes should note the recent case of The Serpentine Trust Ltd v HMRC  UKFTT 876 (TC).
The charitable trust ran two art galleries for which entry was normally free, but as part of its fundraising, it ran several schemes under which supporters paid a stated amount and became entitled to benefits such as free invitations, the opportunity for private hire and free catalogues.
HMRC considered that VAT was chargeable on the entire support sums received by the trust at the standard rate. The tribunal agreed. The judgment stated that the benefits were of value to the supporters, even if the ultimate cost was low. VAT was therefore payable at the standard rate.
This decision has implications for all charities running support schemes as payments of this type will be regarded by HMRC as a supply of services, rather than as a VAT-free donation.
If you have any concerns about whether your charity's fundraising activities are subject to VAT or would like more general advice on fundraising for your charity, please contact Liz Brownsell in the Charities team on 01865 253278.