Brown urged to cut marathon tax rates

The chancellor, Gordon Brown, was today urged to cut the government's tax take on charity proceeds from the London marathon - the biggest fundraising day of the year.

Every year, London marathon runners raise more than ?30m for a wide range of charities, with hundreds of thousands of pounds going to the 'official charity' linked to the event.

Last year, Shelter - the only official charity - raised ?850,000 on the day, while this year Sense and the British Heart Foundation aim to raise more than ?2.5m between them.

This year's marathon will also see a charity fundraising 'race' between the disgraced peer Lord Archer, who aims to raise ?1.66m, and his challenger, bank worker Laura Foster, who is running as 'Ms Ordinary'.

The pair, who are attracting donations through fundraising internet pages, could break the marathon fundraising record held by the rap artist and producer P Diddy, who raised ?1.2m in the New York marathon last year.

But many charity fundraisers taking part this Sunday will be running the first four and a half miles - 17.5% of the race - for the VAT collector. Increasingly strict enforcement means that charities will take more of a pounding than ever before, tax expert Peter Ladanyi has said.

Mr Ladanyi, of the chartered accountants firm Chantrey Vellacott DFK, called on Mr Brown to scratch the clawback. "It is wrong, it is completely wrong," he told BBC Radio 4's Today programme.

The chancellor should "ensure that every penny that people raise from running the marathon this weekend goes to the charity rather than any of it going to the government," he added.

Runners who receive a charity place in return for a pledge to raise a minimum amount of cash - a so-called "golden bond" - will see the funds they raise hit by tax rules introduced four years ago.

Since then, enforcement has been hit-and-miss, but now the government is clamping down, issuing new guidance to charities, Mr Ladanyi said.

"It is a policy that has been enforced more vigorously perhaps over the last few years and it is a policy which Customs would appear to be actually stating in their revised guidance. It is not a new thing but it is something, perhaps, which they are laying a greater stress on."