He said those charities that insisted their runners pay a registration fee or commit to a minimum amount of sponsorship before taking part were in effect selling places in the race – and VAT was now due.
Only money raised above the minimum or the fee would be free of the tax, he said.
It meant charities could – as they had always been able to – choose whether to plan their sponsorship of runners in a way that enabled them to recover some of the VAT on costs associated with the race – or in such a way that no VAT was due on the amount paid to them by runners.
Healey said donations where nothing was received in return were VAT free – ‘even if a charity asks individuals to “pledge” or “commit” to raise a certain amount of sponsorship’.
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