Is the charity acting as a disclosed agent, undisclosed agent, or principal?
There are different VAT implications depending on whether the charity is acting as (1) a disclosed agent or (2) an undisclosed agent or principal. Most charities use the services of a specialist company to organise challenge events – the charity does not want the responsibility of organising the itinerary, accommodation, flights, group leader etc. If the charity uses a specialist company they will normally have a contract setting out exactly who is responsible for what. A charity will be acting as a disclosed agent if: • both the charity and the specialist company have agreed that the charity will act as the company’s agent; and • the charity discloses the name of the principal (the specialist company), for example in the event terms and conditions and on all tickets issued; and • the charity is not taking any significant commercial risk in relation to the event (for example, the charity does not have any financial liability should something go wrong). If these agency disclosure condit
