Scottish tax changes will not affect Gift Aid, HMRC confirms

Charities north of the border will be able to claim the tax break at the same rate after 2016

HMRC headquarters in Whitehall
HMRC headquarters in Whitehall

New rules allowing the Scottish government to vary the amount of income tax paid in Scotland will not affect how much Gift Aid charities can claim, HM Revenue & Customs has confirmed in a briefing note published last week.

The Scotland Act 2012, which became law on 1 May, will allow the Scottish government to vary tax paid by Scottish taxpayers from 2016 onwards.

Members of the Charities Technical Group, set up to advise HMRC on the changes, had expressed concern that this meant charities would need to process two different rates of Gift Aid and would have to determine where a donor was based before they could claim tax relief on his or her donation.

But HMRC has confirmed that charities will be able to claim Gift Aid as normal and, if Scottish donors are paying more tax than the rate elsewhere in the UK, they will be able claim back the difference for themselves.

"The Charities Technical Group, consulted as part of this process, were extremely concerned about the potential administrative burden from identifying donors liable at the Scottish rate of income tax in order to make accurate claims," the HMRC briefing says. "In some cases, it was suggested that charities would need to set up two different internal systems to process claims.

"The government has taken account of these views and agrees that the additional burden placed on charities would be disproportionate.

"Gift Aid for charities will therefore continue to apply at the UK basic rate, regardless of the tax position of the donor."

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