After the hottest ever London Marathon on 22 April 2018, your thoughts are probably turning to London Marathon 2019. In order to maximise your charity’s income from this event, we recommend you consider whether your registration fees have been set up in the best way from a Gift Aid and VAT perspective.
Gift Aid – If you do not charge runners a registration fee, then they will be receiving a benefit from the charity as they have received a free place in the marathon. As the runners have received a benefit, you should not be claiming Gift Aid on any donations made from people connected to them (spouse, brother, sister, parent, grandparent, grandchild or spouse of the above). However, if the runners pay a registration fee at least equal to the individual ballot entry fee, then they won’t be receiving a benefit and there will be no restriction on the donations you can claim Gift Aid on. The 2019 standard ballot entry fee is £39.
VAT – If you do not charge a registration fee, then you will not be able to recover the VAT on your Gold Bond places. However, if you charge a small VATable registration fee, then you will be able to recover all the VAT on your Gold Bond places. This is likely to lead to a net VAT recovery as the price charged by London Marathon for a Gold Bond place is likely to be much higher than any registration fee you charge. These rules also apply to any other events organised by a for-profit organisation (e.g. the Great North Run). If the event is organised by another charity, then these rules will not apply, as the fundraising exemption will apply, so any income, including registration fees will be exempt.
Therefore we recommend you charge a registration fee of at least £39 for 2019 (inclusive of £6.50 VAT if the charity is registered for VAT.)