The VAT treatment of a challenge event depends on whether the charity acts as:

(1)a disclosed agent; or

(2)an undisclosed agent or principal.

Most charities use a specialist company to organise challenge events because the charity does not want the responsibility of organising the itinerary, accommodation, flights and group leader. If the charity uses a specialist company, there is normally a contract which sets out who is responsible for what.

A charity acts as a disclosed agent if:

(1)both the charity and the specialist company have agreed that the charity acts as the company’s agent; and

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