TREASURY SET TO RUN OFF WITH 17.5% OF CHARITY MARATHON MILLIONS

8.28.56am UTC (GMT +0000) Thu 15th Apr 2004

The Treasury will cream off 17.5% of money raised by charity runners in this Sunday's London Marathon.

Many charities offer 'free' places to runners in exchange for raising a specific amount of cash. However, information revealed in a Parliamentary answer to Liberal Democrat London Mayoral candidate, Simon Hughes MP, show those payments are subject to VAT at 17.5%.

Simon Hughes said:-

"It is scandalous that runners in the marathon who thought that all their hard earned cash would be going to good causes is being creamed off by the Chancellor.

"Many thousands of runners on Sunday will have trained for months, safe in the knowledge the money they raised in good faith would be going straight to their nominated charity. But the Treasury is set to run off with millions of pounds donated to help the most vulnerable in society.

"It is outrageous that VAT will strip charities of cash for good causes because the Treasury refuses to close a ludicrous anomaly in the law. Gordon Brown must act urgently to close this loophole, ensuring that charitable donations given by Marathon runners remain exempt from VAT."

ENDS

Notes to editor

The information was revealed in a Parliamentary answer to Mr Hughes

Simon Hughes

To ask the Chancellor of the Exchequer, if he will set out his policy on imposing VAT on sponsorship payments from those entering runners in the London Marathon (162511)

Mr John Healey

Charities and their donors in the UK will benefit from a wide range of VAT reliefs and exemptions. In accordance with the requirements of the EU Directives on which UK VAT law is based, sponsorship raised by runners for organisations who have paid for places in the London Marathon is free from VAT. However, any payment required in exchange for a place is subject to VAT and consequently an organisation may be able to reclaim some of the VAT it incurs in providing this service