3 October 2019 was Gift Aid Awareness Day. CTG participated by supporting charities to encourage their donors to Gift Aid their eligible donations and to raise awareness of Gift Aid.

The Charity Finance Group (CFG) put together tools and resources for charities to share from their platforms and in their retail shops to encourage their donors to tick the box. CFG also held a webinar with participants from HMRC , answering Gift Aid questions from charities.

Richard Bray, Charity Tax Group (CTG) Vice Chairman, has also participated in a podcast with the Charity Finance Group on the Future of Gift Aid. This interview provides an insight on the various Gift Aid related projects that CTG is currently working on.

In addition Paul Winyard from NCVO, discussed the Gift Aid related proposals made by the Charity Tax Commission.

 

Influencing Gift Aid policy

CTG plays a leading role in discussions with HMRC, HM Treasury and Ministers on Gift Aid policy, having worked on Gift Aid since it was created. CTG is a founder member of HMRC’s Charity Tax Forum and is actively involved in working groups and bilateral meetings with HMRC officials. Our expertise and strong working relationship with officials helps to ensure that policy that is developed is informed and understand the practical implications for charities and donors.

Examples of CTG’s influencing role this year include successful negotiations with HMRC to adopt a pragmatic approach to the inclusion of full forenames on Gift Aid Declarations. HMRC had initially wanted to make this mandatory from 1 April 2019, but representations from CTG and its member charities explained the practical difficulties and other better ways of targeting the policy, with the result that there will be no immediate (and costly) mandatory change in the rules – read more here. CTG also played an important liaison role between the Government and intermediaries when issues relating to fees and Gift Aid hit the national press. We continue to work with both Facebook and HMRC to ensure that the audit trail is robust enough to allow Gift Aid to be claimed on Facebook donations and hope to have positive news on this front shortly.

On the practical side, CTG has also secured important clarifications from HMRC about donor data (including for example addresses) that can be accepted by a charity when making a Gift Aid claim. We found that many charities had been operating too cautiously and missing out on valid Gift Aid claims. Make sure you are aware of what is permissible by reading a summary of those discussions here. HMRC also shared helpful information on the most common Gift Aid errors and queries to the helpline here and a useful webpage with instructions on how to complete the Gift Aid donations schedule here. We are also heavily involved in discussions with HMRC on the Gift Aid donor benefits guidance and the planned review of the Chapter 3 Gift Aid guidance.

Gift Aid Practical Issues Working Group

CTG’s Gift Aid Practical Issues Working Group meets quarterly to discuss practical Gift Aid issues, share best practice and guide CTG’s Gift Aid policy engagement. Over 80 charities are now on the working group mailing list, with 30+ organisations represented at most meetings. As an introduction to the group’s work, a detailed summary of the working group’s activities in 2018 can be read here. At the latest meeting, in September, the group discussed Gift Aid relating to Facebook donations, the Fundraising Code and the future of Gift Aid.

Feedback from Working Group members has indicated that participation in the group has helped them to claim hundreds of thousands if not millions of pounds in Gift Aid for their charity, that they may otherwise not have done.

To join the Working Group or submit a practical Gift Aid question, please contact us at info@charitytaxgroup.org.uk. Don’t just take our word for it!

Keren Caird, Retail Business Development Gift Aid Manager, Sue Ryder

“I have been a member of this working group since its formation. Since that time membership has grown considerably with representatives from large and small charities joining.  The group meets every three months, to discuss everything Gift Aid and share examples of best practice. The group has a close working relationship with HMRC officials, and they regularly attend the meetings.  As a result of this relationship, members of the group have been invited to join two HMRC working groups on the future of Gift Aid and Gift Aid donor benefits. This gives the group a unique opportunity to influence future guidance and policies, with the overall goal of ‘future proofing’ Gift Aid as technological systems develop. I always feel motivated and well informed at the end of each meeting and really enjoy the opportunity to spend time with colleagues across the charity sector. I recommend that all charities operating Gift Aid get involved in this group.”

Recent Gift Aid news

The CTG newsletter is the best place to keep up to date with news relating to Gift Aid. Stories from the last 12 months include:

• Gift Aid on donations received via Facebook
• HMRC updates Gift Aid Donor Benefits guidance
• Charity Tax Commission report includes a range of Gift Aid proposals
• CTG working group on the “Future of Gift Aid”
• Gift Aid fraudster jailed: cautionary tale for charities
• Gift Aid: HMRC feedback on common errors and frequent questions to the Charities Helpline
• Important clarifications from HMRC on Gift Aid and data
• JustGiving announces removal of platform fees and optional Gift Aid service
• How prevalent is Gift Aid fraud? Two prosecutions last year
• Gift Aid Small Donations Scheme increase approved
• Scottish-based charities claimed £80m of Gift Aid last year
• Charities encouraged to submit full forename details on Gift Aid claims where possible
• Charity Commission inquiry into charities over concerns about Gift Aid claims
• Online guide to completing Gift Aid donations schedules
• CTG and CRA welcome relaxation of the rules on retail Gift Aid letters in the Budget
• Intermediaries and Gift Aid fees
• New powers to vary Welsh Income Tax rates – implications for Gift Aid
• JustGiving announces consultation with charities on Gift Aid charges
• Gift Aid and coffee mornings/bake sales – message from the Minister

Charity Tax Group Gift Aid Resources

The Charity Tax Group website has a range of guidance relating to Gift Aid that charities may want to review.

• HMRC’s detailed Gift Aid guidance (Chapter 3)
• Conditions
• Gift Aid declarations
• Charities online
• Gift Aid donor benefits
• Gift Aid claims by charities
• HMRC audit
• Corporate Gift Aid
• The position of deeds of covenant
• Raffles and auctions – Gift Aid
• Sponsored events – Gift Aid
• Membership subscriptions – Gift Aid
• Allowing access to view charity property – Gift Aid
• Donated goods – Gift Aid
• Gift Aid Small Donations Scheme (GASDS)

Gift Aid statistics

Earlier this year, HMRC published the charity tax statistics relating to the tax year 2018-19. CTG Chairman, John Hemming noted: “We are pleased to see that the amount of Gift Aid claimed by charities has increased by 7% after a 3 year plateau. Efforts to promote Gift Aid and improve donor understanding are ongoing and CTG is working closely with charities and digital experts to ensure that Gift Aid is future-proofed. The 33% increase in the amount of GASDS claimed is very welcome, but more can be done to maximise the awareness and uptake of this relief”. 

The statistics showed:

• Gift Aid claimed by charities was up £90m to £1.35bn
  • The £1.35bn of Gift Aid claimed came from eligible donations worth £5.41bn.
  • There were claims from 73,050 charities up by 850 on the previous year.
  • 160 charities claimed £1m+ Gift Aid (a total of £620m) & 51050 charities claimed <£5k (a total of £60m)
• Gift Aid Small Donations Scheme (GASDS) payments were up £10m to £40m
• Higher rate relief was up £30m to £520m

CTG is hopeful that the amount of Gift Aid claimed will continue to grow next year. HMRC estimate that up to £560m of Gift Aid is unclaimed (excluding higher rate relief) but also that up to £180m of Gift Aid is claimed incorrectly.