Changes to Gift Aid declarations

HMRC recently published revised model Gift Aid declarations. It has always been the case that donors must have paid enough tax (income tax or capital gains tax) to cover the tax which the charity will reclaim on their donations. However, now, a charity must give a full correct explanation of this requirement. This explanation does not have to be on the face of the declaration made by the donor so long as some evidence can be shown by the charity that it has been given in some other way.

The wording of a declaration does not have to follow the model Gift Aid declarations produced by HMRC but there are strict requirements as to what information must be obtained and HMRC must be satisfied that this has been followed. Guidance is available, but it may well be simpler to use the model declarations. There is additional wording in these that state that “other taxes such as VAT and council tax” do not qualify. This is not a statutory requirement but clearly HMRC think it is worth stating.

The revised wording took effect from 24 February 2012 and HMRC would like charities to incorporate the new wording as soon as possible. It does not require charities to get new declarations for existing donors but where charities are taking new declarations, the new wording should be used. Charities have until 31 December 2012 to adopt the new requirements after which forms using the original wording will no longer be accepted by HMRC.

For more information please contact Amanda Wood.