# VAT and the London Marathon

- Link: https://fundraising.co.uk/2004/04/15/vat-and-london-marathon/
- Published: 2004-04-15T23:00:00+01:00
- Author: Howard Lake

Requiring charities to pay tax on Golden Bonds runers in the London Marathon is 
not a new tax, say charity law experts Bates, Wells and Braithwaite. They add that
there is a way for canny charities to maximise their VAT savings.
Charity law experts
Bates, Wells and Braithwaite have added their analysis to the issue of VAT being
levied on charities using the Golden Bond system in this year’s London Marathon.
The issue has appeared on the front page of The Times for two days in a row.

 

 

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The firm of solicitors say that this is not a new tax. If charities buy places in
commercially organised events and require supporting runners to raise a minimum 
sum of sponsorship in order to take part then that minimum sum is liable to VAT.
The firm adds that this has long been Customs & Excise’s view of the London Marathon
and similar commercial events.

 

 

“What is new,” said Bill Lewis at the solicitors, “is they have put this view in
writing, to be published in a revised VAT Charities notice due for release later
this month.” He points out that most sponsored runners in the event are not affected
by this rule: “if a charity simply asks for a commitment or pledge to raise a certain
sum of money, and allows the supporter to run irrespective of the amount they raise,
then none of the sponsorship money is liable to VAT.”

 

 

He also points out that The Times fails to point out that there is an opportunity
here for canny charities. “If you charge the runner registration fee subject to 
VAT – which could be literally as low as £1, Customs & Excise will let you reclaim
the VAT charged on the cost of buying places in the event,” he suggested.

 

 

He concludes by recommending that “the way forward to maximise VAT savings is to
start charging registration fees, charge VAT on the fees, and cease to require a
minimum sum of sponsorship from your runners. Instead set them targets, ask them
to make pledges, etc.”

 

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