RETAIL GIFT AID: NEW SIMPLIFIED END-OF-YEAR LETTERS
We are pleased to report that HMRC has now agreed a simplified end-of-year letter for charities using the de minimis retail gift aid option: Gift Aid template letter for the end of year letters – De Minimis – Methods A & B. These end-of-year letters to donors are a compulsory part of operating a Retail Gift Aid scheme using Methods A or B. However, under the de-minimis option, an end-of-year letter is only required where donations in a given year are above £20 or every three years as long as this is part of the retail Gift Aid terms and conditions agreed by the donor.
The new HMRC template for the de minimis option represents a substantial simplification:
It provides a single figure covering the total Gift Aid claimed compared to up to 12 figures in the old letter.
The length of the mandatory content has been reduced significantly.
Around half of the mandatory content can be provided on the reverse of a printed letter or at the bottom of an email as additional information.
For 2023, HMRC has indicated that it is content for either the new template or old template de minimis letter to be sent, but the new letter will be compulsory from next year.
These changes were introduced following discussions between HMRC and representatives of the Charity Tax Group, Charity Retail Association, Sue Ryder, British Heart Foundation, Cancer Research UK and The Children’s Society. Dialogue continues in relation to simplifying the full suite of retail Gift Aid template letters which should be in place for 2024.
The HMRC deadline for sending the end-of-year letters is 31 May each year.