Recent years have seen a number of important practical changes to the operation of Gift Aid.

The new Government may wish to review some of these policy changes (as well as identifying other opportunities for Gift Aid simplification) and it is important that we track their impact and any direct or inadvertent consequences for charities, so we are best able to influence any future policy developments. Please send any thoughts to info@charitytaxgroup.org.uk.

Introduction of Charities Online

Charity Digital News recently published an interesting commentary on the impact of the introduction of Charities Online, three years on. There were initially concerns about the lack of consultation with charities and rushed implementation (and associated costs) and teething problems, but charities do now report a significant reduction in the administration of Gift Aid submissions and increased speed of repayments.

We would welcome feedback on your experiences of:

• using Charities Online for processing both Gift Aid and GASDS claims, including any comments on the software available from by both HMRC and commercial suppliers.
• the speed of claims payments and how often the repayment is lower than the claim
• dealing with the Charities Helpline
• using the paper form ChR1 (where relevant)

HMRC’s Charities Outreach team last year provided feedback on the use of the Charities Online service, including a summary of the main queries received by the helpline and a review of the top errors with claims.

CTG understands that the Government Gateway is to be replaced with a new portal (called the Transaction Engine) some time in 2018, but it remains to be seen what implications this will have for Charities Online.

New Gift Aid Declaration 

CTG welcomed the introduction of a shorter Gift Aid Declaration which we hoped would help to ensure that Gift Aid is easier to understand for donors, maximising take-up by those eligible for the scheme. Due to concerns about the tax gap and the need for donors to be fully aware of the requirement to have paid sufficient tax to cover their Gift Aid claim, HMRC insisted on a new wording making clear this responsibility to pay any difference. There were inevitably concerns that this increased focus on personal tax status could have a chilling effect on some donors, but we have been pleased to find that in practice donors and charities have adapted to the new Declaration.

We would welcome feedback (both positive and negative) from charities on the impact, if any, of the Gift Aid Declaration changes on donors and whether you use the template provided by HMRC or a variation on this

Following representations by CTG and others HMRC agreed that charities and CASCs holding stocks of printed materials that were ordered and printed before the new declaration was introduced (October 2015), could use up their current stock before using the new declaration.

We would welcome feedback on whether your charity is still using any old printed Gift Aid Declaration stocks and, if so, how many you have remaining?

Charities are reminded that all other online and paper Gift Aid Declarations should have been updated in line with the new HMRC guidance. Further information is available here.

Introduction of new methods for retail Gift Aid

In 2013, HMRC updated its guidance on the operation of the “Standard Method” of retail Gift Aid, while introducing two new alternative methods for operating retail Gift Aid (“Method A” and “Method B” – depending on whether the charity operates the shop itself or via a trading subsidiary) which are designed to simplify the process for notifying donors of the sale of their donated good (allowing an end of year statement rather than periodic updates) with standard letters in use from 2015/16. HMRC’s revised guidance also requires charities to keep records of training for staff and volunteers, and charities should also be carrying out their own checks to ensure the relevant method is being operated correctly.

We would welcome feedback from charities on:

• Whether they have moved to “Method A” or “Method B” and what their experiences have been to date. 
• Reasons (where relevant) for sticking with the “Standard Method”
• The quality of the guidance available and thoughts on the wording on the template letters to donors
• Whether there would be support for the introduction of a de minimis limit of sale proceeds before an end of year letter has to be sent to a supporter, and if so what an appropriate level would be.