Fundraising events and lotteries

Charities do not have to pay tax on profits made from lotteries or fundraising events, such as jumble sales or ceilidhs. This is as long as:

• all your profits go to your charity’s primary purpose
• your fundraising event qualifies for exemption from VAT under the VAT rules for fundraising events
• if you run a lottery, it has an operating licence - if you do not, you will need to contact the Gambling Commission

When a subsidiary trading company organises a lottery to raise money for its parent charity, it will not pay tax on the profits it gives to the charity. All of its other profits will be taxed. Lottery ticket sales are exempt from VAT.

Taken as a stand-alone excerpt from UK government HMRC and CCEW pages