Charity Tax Group in talks on free Gift Aid database

It has approached commercial suppliers about initiative intended to cut red tape for the sector

Helen Donoghue, director, Charity Tax Group
Helen Donoghue, director, Charity Tax Group

The Charity Tax Group is talking to commercial suppliers about developing a free Gift Aid database that it says would reduce red tape for charities.

After the Budget in March, HM Revenue & Customs agreed to work with the voluntary sector to develop a database that would allow charities to upload details of donations rather than keeping paper records. It said this would support the online filing of Gift Aid claims, which is expected to be introduced in 2013.

Helen Donoghue, director of the CTG, said HMRC had agreed to support the creation of the universal database, but would not pay for it. The CTG, which campaigns for a better deal for the sector on tax, had approached a number of suppliers about developing the database.

"Creating a basic database would not be an expensive proposition," she said. "We're hoping that a supplier will do it as a goodwill gesture towards the sector. "HMRC won't fund it because it currently doesn't have the resources. We will have to do it ourselves."

Donoghue said she expected the system would drive down compliance costs and would be particularly helpful to small charities that find Gift Aid too cumbersome.

She said HMRC would be able to use the database to carry out remote audits of Gift Aid claims."This could be an end to the dreaded Gift Aid audit," she said.

In future, Donoghue said, the database could be used for more complex functions such as creating 'universal donors' – people who agreed that every donation would automatically attract Gift Aid. However, that was not part of the CTG's existing plans, she said.

An HMRC spokesman said that it had agreed to work with the CTG and other members of the HMRC-created charity tax forum on the specifications for a database.

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