CTG has responded to HM Treasury’s consultation into simplifying the Gift Aid donor benefit rules, highlighting the need for clearer guidance and practical reforms, which offer real improvement to the charity sector.

CTG strongly support the existence of the Gift Aid donor benefit rules: benefits to donors are an important way of charities saying “thank you” to their supporters, incentivising giving, and building a relationship with the donor. While welcoming simpler rules if they encourage take-up, CTG believes that simplification should not be an end in itself. CTG’s response highlighted the diverse nature of the charity sector and called on the Government to recognise that a one-size-fits-all approach may not be appropriate.

CTG expressed concerns about the proposals to remove the existing benefit thresholds entirely, and to introduce an extended split payments mechanism as the primary means of dealing with Gift Aid donor benefits. The response acknowledges that while these proposals (particularly those relating to split payments) may benefit some charities, it could create a large administrative burden and be unworkable for a large number of charities. CTG has therefore called for an opt-in for charities if this proposal is taken forward.

CTG’s response also considered the proposal to reduce the number of thresholds, and made it clear that this option might well make the system simpler and easier to follow. We highlighted the importance of a low-value disregard for benefits, but called for it to be higher than proposed so that no charity would lose out compared to the current system. We also agreed that the current Extra-Statutory Concessions should be legislated for, and suggested that in doing so HM Treasury might take the opportunity to clarify the guidance (including on important issues such as the in consequence rules) as this was still a barrier to charities operating the donor benefits rules most effectively.

Finally, CTG called on the Government continue to consult the charity sector to gain a full understanding of what effects such changes might have. This, we hoped, would help avoid any unintended consequences that might leave the system open to abuse or threaten the integrity of claiming Gift Aid.