A recent Upper Tribunal decision has questioned whether the UK's VAT exemption for fund raising events by charities and others is compatible with EU law. The decision concerned Loughborough University's Students' Union (SU), in particular its claim to recover VAT on the proceeds of student union balls through what is called the "cultural exemption". The Tribunal held that as the SU's sabbatical officers were salaried, the SU's activities were not being managed and administered on an essentially voluntary basis. This took the SU outside of the scope of the VAT cultural exemption.

However this is not the end of the matter. The Upper Tribunal has ordered the First Tier Tribunal to consider whether the UK's separate exemption for fund-raising events by charities is compatible with EU law. If this UK exemption is found to be more restrictive than it should be under EU law, this may be good news for charities and others wishing to claim a VAT exemption for fund-raising events.

The decision is considered in more detail by Kevin Lowe, one of our tax experts here