VAT on leftover fundraising merchandise
Leftover adult T-shirts and mugs sold after a qualifying fundraiser are standard-rated, rather than covered by the event exemption. Continuous website trading does not qualify as a fundraising event. Check the goods and your VAT registration position before selling. Cambridge China Bridge can help organise the stock and sourcing records.
Separate event sales from later stock sales
HMRC's fundraising-event exemption concerns qualifying events run by charities and other qualifying bodies. Bought-in goods sold at a qualifying event can be exempt. Do not carry that treatment into later sales simply because the merchandise was originally ordered for the fundraiser.
At the event's close, record the remaining stock by product and batch. Separate completed event sales from subsequent orders, and give your accountant the event details, selling organisation and proposed sales channels.
Classify each leftover product
HMRC explicitly identifies surplus adult T-shirts and mugs sold after the event as standard-rated. For a VAT-registered seller, the standard UK VAT rate is 20%. Commemorative programmes and children's T-shirts remain zero-rated under the guidance; check that the actual product qualifies before assigning its tax category.
Keep separate product entries for goods with different VAT treatments. An event logo does not tell your accounts team whether the item is an adult garment, children's garment or qualifying printed programme.
A website shop is not automatically an event
HMRC says semi-regular or continuous activities, such as operating a shop, cannot be an event. An ongoing website shop should therefore use the goods' normal VAT treatment rather than the fundraising-event exemption.
An online fundraiser held for a specific period can qualify if it meets the other exemption conditions. Before treating a separate online fundraiser as exempt, ask your adviser to review its organiser, purpose, publicity and event limits. Merely setting a closing date on a leftover-stock listing is not enough to establish eligibility.
Check registration before setting the checkout
Standard-rated goods and zero-rated goods both count towards taxable turnover; exempt sales do not. Review the selling organisation's total taxable turnover, rather than this leftover batch alone, against HMRC's registration requirements.
If VAT-registered, configure the checkout to include VAT at the correct rate. Ask your accountant to confirm the registration position before activating listings. For presentation of trade prices, see VAT-exclusive website prices.
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Prepare a stock handover your team can use
Give the warehouse and website team a shared stock list showing product description, batch, remaining quantity, sales channel and the VAT treatment approved by your accountant. Test a checkout and reconcile its order record with the stock movement before opening sales.
Keep the factory specification, approved artwork and inspection records with that list. Our promotional merchandise guide covers branding and product checks; use the charity first-import budget guide for the separate import-budget discussion. Cambridge China Bridge's staff in China can help assemble the factory-side records.
Frequently asked questions
Do leftover charity mugs attract VAT?
HMRC treats surplus commemorative mugs sold after a qualifying fundraising event as standard-rated. A VAT-registered seller applies 20%; check the seller's registration position before listing.
Can our charity website sell leftover stock VAT-free?
An ongoing shop does not qualify for the fundraising-event exemption. Apply the goods' normal VAT treatment and check registration. A separately organised online fundraising event may qualify if all conditions are met.
Are children's fundraising T-shirts still zero-rated?
HMRC's post-event guidance says children's T-shirts remain zero-rated. Confirm that the actual garments qualify; do not apply that treatment to adult T-shirts.
Do zero-rated souvenir sales count towards VAT turnover?
Yes. Zero-rated and standard-rated sales count towards taxable turnover. Exempt event sales do not. Review the selling organisation's total taxable turnover with your accountant.