HMRC could introduce clearer Gift Aid declaration by year's end

It says the new document should be easier to understand and "more foolproof"

HMRC
HMRC

HM Revenue & Customs could publish an "easier, more foolproof" model Gift Aid declaration by the end of the year, a senior official has said.

Cathy Wilson, head of charity tax policy at HMRC, told the Charity Tax Group annual conference in London on Monday that HMRC was hoping to publish the new declaration later this year or in early 2015.

She said the new declaration should be "a bit easier to understand and a bit more foolproof, if that’s possible".

HMRC had proposed a new, shorter Gift Aid declaration in a consultation document released last summer, coming in at 52 words against the previous version’s 111. Both are published at the end of this story.

The redrafted declaration received a mixed reception, according to HMRC’s summary of responses published earlier this month. The response document says that the discussion would be continued by a working group chaired by HMRC and the Treasury, reporting to the CTG.

Wilson said that HMRC would develop the new declaration alongside the Behavioural Insights Team, the so-called "nudge unit". "We’re going to test these in a live environment with a real charity to understand what the response of real-life donors is," she said.

Kevin Russell, one of two deputy chairs of the CTG, said that a shorter declaration was a good idea in theory. "The question is, should we be trying to make donors tax-aware, and how do we do that," he said.

Conference delegate Sara Bainbridge, a policy adviser at Cancer Research UK, said that market research it had conducted found that the public responded better to a CRUK declaration, based on HMRC’s new proposal, but with "friendlier" wording, than to either the old or the proposed model.

Speaking on the same panel, Daniel Fluskey, head of policy and research at the Institute of Fundraising, said the organisation and its members were considering whether corporate Gift Aid should be reformed so that charities rather than donor companies received the tax relief on amounts donated.

"We haven’t got a proposal that corporate Gift Aid should change, but it’s something a few of our members have been talking to us about," he said. "The potential is quite appealing, I think, but the flip side is how would companies react if they’re not getting the tax relief?"

Existing model declaration

"I confirm I have paid or will pay an amount of income tax and/or capital gains tax for each tax year (6 April to 5 April) that is at least equal to the amount of tax that all the charities or community amateur sports clubs (CASCs) that I donate to will reclaim on my gifts for that tax year. I understand that other taxes such as VAT and council tax do not qualify. I understand the charity will reclaim 28p of tax on every £1 that I gave up to 5 April 2008 and will reclaim 25p of tax on every £1 that I give on or after 6 April 2008."

July 2013 proposed new wording

"I confirm I have paid enough income tax or capital gains tax this year to cover the tax the charity will reclaim on my donation. That tax will equal 25 per cent of my donation. I understand HMRC will check and may tell the charity if I have not paid enough tax."

Sam Burne James recommends

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