HMRC has published an annex to its Gift Aid guidance, setting out how the Gift Aid declaration authorisation process for Gift Aid intermediaries works. The process aims to make it easier for donors who give through digital channels, such as online platforms and SMS text messaging, to Gift Aid their donations, by enabling the donor intermediary to create Gift Aid declarations on the donor’s behalf for that donor’s gifts in the rest of the tax year.

The guidance sets out exactly what a donor intermediary is and gives worked examples of the authorisation process. It also sets out that the intermediary is required:

• to keep a record of the donor’s authorisation
• to keep a record of the date on which the intermediary explained the consequences of making donations with Gift Aid to the donor
• to keep a record of any cancellations of the donor’s authorisation, including the date the cancellation was received
• to issue a statement annually to donors summarising the Gift Aided donations made under the authorisation
• to keep a record of the annual statement (including date) sent to donors

The guidance also makes clear the penalties for which an intermediary will be liable, should they fail to meet any of these requirements, set at £50 per failure up to a maximum of £3,000 in any one tax year.

CTG’s response to the original consultation on drafts of this guidance can be read here. In it, CTG welcomed the Government’s commitment to simplifying the administration of Gift Aid claimed through intermediaries,  but noted that it was important that practical implications for charities should be proportionate, and the user journey be simple and not confusing for donors. For this reason, we argued that the Annual Statement should be made optional or apply only to donors making more frequent or larger donations, and that there should be a passive rather than positive confirmation process for charities confirming Gift Aid eligibility each year. We have also made it clear to HMRC that it would be very impractical for these requirements to be extended to offline donations.

Additionally while we are confident that the new rules will work well overall for online platforms, we believe that further targeted work is needed to improve the process for claiming Gift Aid on SMS-giving. We have also encouraged the Government to give serious consideration to broadening the applicability of the rules to allow a single Gift Aid declaration to be applicable to all intermediaries and consider the long-term viability of introducing changes that are consistent with the aspirations of having a Universal Gift Aid Declaration Database.