HMRC has updated its guidance: How VAT affects charities (VAT Notice 701/1). The Notice explains what a charity is for VAT purposes, how VAT affects charities, how to treat a charity’s income for VAT and what VAT reliefs a charity can get on what it buys.
A guide for charities and VAT here.
The changes are in respect of: ‘Charity acting as an agent’ within section 10 (Charity challenge events) which has been updated to show the correct rate of VAT due from the charity as output tax.
These Charity challenge events are increasingly common – Many charities offer, or encourage participation in, challenge events as a way of raising funds. Challenge events often test participants’ physical and mental endurance, and common examples include climbing mountains and cycling or trekking through inhospitable landscapes. Many charities set a target figure that participants should aim to raise through sponsorship.