VAT and Sponsored Events

What are we able to do with our event without paying VAT

Is it true that we are not allowed to ask marathon runners to raise minimum amounts of sponsorship in return for a free place in the marathon?

Not strictly. You can ask runners to raise a minimum amount but then VAT will be due on the money raised.

So what form of words should we use if we want to avoid paying VAT on any of the sponsorship money raised?

Asking participants to 'pledge' or 'commit' to raising a certain amount of money and not insisting that any money is received before the event occurs, would mean that VAT would not be due on any of the sponsorship money.

So I can't give each of my runners a free t-shirt to wear during the race?

Fortunately, a t-shirt is fine! Customs and Excise do not consider t-shirts, free training advice, free massages and support during the event and pre- and post- race meetings (perhaps including medical treatment, light refreshments and encouragement) as benefits.

What about if we offer a prize to our top fundraiser?

This is not classified as a benefit either and VAT is not payable on the sponsorship income.

Our organisation hasn't bought places in the marathon this time round, instead, we're organising our own run in our town - Do we still have to pay VAT on the entry fees?

If this is one of 15 or less events in the same location in the same year, then you will probably be able to use the exemption for fundraising events.