Charities—charity challenge events VAT examples
Charities—charity challenge events VAT examples

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Charities—charity challenge events VAT examples
  • Example 1—disclosed agent
  • Example 2—undisclosed—event outside the EU
  • Example 3—undisclosed agent—event inside the EU
  • Example 4—accommodation provided by charity from own resources

Example 1—disclosed agent

A charity promotes a challenge where participants will cycle from London to Paris in order to raise funds for the charity. The charity engages the services of a specialist company that will organise the event. The charity is acting as a disclosed agent on behalf of the specialist tour operator and will receive commission for each participant who takes part in the event.

The specialist tour operator will provide the flights, bikes, accommodation, food, etc for the challenge and the charity will promote the event.

The charity insists that the participants raise a minimum sponsorship of £2,000 and they have to pay a registration fee of £200 when they book their place on the challenge.

50% of the sponsorship must be raised and paid directly to the charity eight weeks before the departure date. This represents the cost of the event and is paid to the tour operator by the charity less their commission of 10% of the cost of the challenge (£1,000 – £200 = £800). The charity invoices the tour operator plus UK VAT for their commission. The tour company can recover the VAT charged in the normal way.

Any additional amounts received by the charity as sponsorship will be treated as a donation which is outside the scope