Gift Aid Declarations – HMRC response to queries

The revised guidance on Gift Aid declarations, published by HMRC on 24 February 2012, generated a number of queries. Consequently, HMRC have published further guidance (reproduced below), around the information that needs to be provided to donors making gift aid declarations and how this should be done.

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New guidance on Gift Aid declarations: What charities need to do

 

HM Revenue & Customs (HMRC) Charities published updated guidance on Gift Aid declarations and provided new model declarations on 24 February 2012. This guidance was developed with the help of charity sector representatives to help ensure that charities give a full and correct explanation of the law to their donors before the donor makes the declaration.

Since the publication of the revised guidance HMRC has received a number of queries in regards to these changes and to clarify matters we have provided further information for charities and donors.

It has always been the case that the donor must pay enough tax to cover all of their charitable donations and not just the donations made to that particular charity at that particular time. The mandatory information on the forms ensures that the donor is making an informed declaration, and understands the consequences if they have not paid enough tax to cover all the donations they make under Gift Aid, not just those to one charity or CASC. By incorporating the required information set out in the guidance on the Gift Aid declaration form, charities can be certain that HMRC will not challenge the associated Gift Aid claim on the grounds that the donor gave a valid declaration.

The Gift Aid declaration does not need to incorporate all the information set out in HMRC's model declaration in the guidance if the charity provides that information to donors in a different way, for example if volunteers explain the Gift Aid rules verbally using a set script that includes the mandatory information. But incorporating the information on the form is the simplest way for charities to show they have explained the tax consequences to the donor and ensure that the donor’s Gift Aid declaration is valid.

Charities do not need to change their existing Gift Aid forms immediately; HMRC will continue to accept Gift Aid claims on donations made using forms based on the wording in the old HMRC model declaration until 31 December 2012. However where possible charities should seek to incorporate any additional information required under the new guidance as soon as possible, or amend their processes to ensure that staff and volunteers are providing the correct information to donors.

Charities might also like to remind donors who have made enduring Gift Aid declarations of the rules on tax to cover, perhaps through their regular mailshots.

Finally, where a charity has already received a Gift Aid declaration based on the old wording in the guidance they do not need to ask the donor to supply a new declaration with the new wording to support that donation for gift aid purposes. It is only new and where charities are replacing enduring declarations going forward that need to be based on the revised wording. Charities may choose to replace their existing enduring declarations with new ones based on the new guidance if they so wish but there is no requirement that they do so.

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Technical Team

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