VAT on London Marathon charity runners "could reach £5m"
Howard Lake | 14 April 2004 | News
Accountancy firm Chantrey Vellacott DFK says that the VAT bill for charities with Golden Bonds in this Sunday’s London Marathon could be as high as £5 million.
HM Customs & Excise will be levying 17.5% VAT on charities which have paid to guarantee a place in the London Marathon with a Golden Bond on the grounds that this is an entrance fee and therefore liable for VAT. Other sponsored runners will not be affected.
The power to levy VAT on charities for this reason is not new. The Treasury emphasised this in a statement: “There has been no change in the VAT rules, there is no question of a clampdown.”
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The issue was highlighted in a Commons written answer to Simon Hughes MP, the Liberal Democrat candidate for London Mayor, who described the crackdown as outrageous.
Some charities affected are already aware of the VAT issue but it is likely that many sponsored runners with a Golden Bond are not. As such, according to Chantrey Vellacott DFK on BBC Radio 4 this morning, they will be running four of the miles of the marathon just to meet the charity’s VAT bill.
Gemma Peters, Mencap’s Head of Events and Fundraising and Chair of the Event Managers Forum representing 300 managers from different charities, said: “Levying VAT on sponsorship will mean that £50,000 of the money our London Marathon team have worked so hard to raise will now go straight
to the government rather than to improve the lives of people with a learning disability. People running the marathon for charities like Mencap will doubtless be disappointed to discover that nearly a fifth of the money they raised will now go to the tax man and not to the individuals who need it most.”
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.