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Gift aid declarations

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HMRC has published new gift aid declarations for one-off donations, multiple donations and sponsored events, following a series of discussions with the Charity Tax Forum Gift Aid working group. Charities and community amateur sports clubs (CASCs) holding stocks of printed materials using the previous model declaration may continue to use these until 5 April 2016, after which the new declaration must be used. The Charity Tax Group (CTG) has expressed concerns that the increased focus on personal tax status could have a ‘chilling effect’ on some donors, but says it is an improvement on earlier HMRC drafts which stated that donors would be liable for any tax shortfall. The Low Incomes Tax Reform Group (LITRG) criticised HMRC for ‘targeting compassionate individuals rather than charities to redress gift aid blunders’.

CTG chairman John Hemming commented: ‘The introduction of a shorter gift aid declaration is a welcome development which should help to ensure that gift aid is easier to understand for donors, maximising take-up by those eligible for the scheme. We are pleased that following discussions with the sector HMRC has agreed to phase the implementation of the new gift aid declarations until April next year. However, more needs to be done to promote awareness of this change, to ensure that charities are compliant with the new gift aid declaration and do not face the prospect of invalid claims.’

Anthony Thomas, LITRG chair, added: ‘[On previous occasions] when Finance Bill clauses on gift aid have been debated in Parliament, a Treasury minister has given an assurance that when a non-taxpayer makes a gift and mistakenly uses gift aid, HMRC’s practice is to approach the charity for reimbursement of the tax element of the gift, rather than the donor. The same should apply when a donor erroneously continues with a regular gift under a gift aid declaration made when they were a taxpayer.’

Meanwhile, HMRC updated the gift aid chapter to Charities: detailed guidance notes in October 2015 with changes to paragraphs 3.6.2, 3.6.8 and 3.39.33, concerning a charity’s obligation to make donors aware of their liability for any shortfall should they have paid insufficient tax to cover gift aid claims.

Issue: 1283
Categories: News