Bates Wells and Braithwaite on VAT and The London Marathon
Howard Lake | 15 February 2005 | News
Charity law specialists Bates Wells and Braithwaite have issued their advice on current concerns about charities losing out on VAT due to Customs & Excise from money raised in the London Marathon.
The advice appears in the firm of solicitors’ Charity & Social Enterprise Department’s Email Update.
This sheds light on the article in today’s edition of The Times on page 2 headed “Tax grab on cash from marathon”. The article states that Customs & Excise will be “grabbing” £4.5 million in VAT from money raised by charities whose supporters take part in the London Marathon using places secured in the event by the charities under the Marathon’s Gold Bond Scheme.
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It suggests that that VAT will be levied on the pledged amounts raised by all runners if charities refuse to allow any runner to take part in future marathons if they fail to meet their pledge for the marathon they run that year.
This is not the case. Customs & Excise policy team have assured Bates Wells and Braithwaite that The Times’ article is not correct. The article apparently arose from a rogue ruling to a charity by one of their officers in the field which has now been rescinded. The policy remains as published in the Charities VAT notice.
In other words, if a charity asks a runner to pledge to raise a sum of money, and the runner can still take part in the marathon if they fail to meet the pledge, there is no VAT charge. A charity blacklisting a runner from entering future marathons using a charity provided place would not taint this.
Bates Wells and Braithwaite should know: the firm helped Customs & Excise to write the Charities VAT notice. This explains that no VAT is charged on money raised by a runner, if a charity asks the runner to pledge to raise a sum of money, but allows the runner to take part in the event whether or not they meet the pledge.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.