Charity shops lobby for change in Gift Aid rules

Association of Charity Shops wants tax back on donated items

Charity representatives are lobbying the Government to make it easier for charity shops to claim Gift Aid on donated items.

The Association of Charity Shops is holding a series of meetings with the Treasury and HM Revenue & Customs about the operation of retail Gift Aid schemes, which enable charities to claim back tax on the sale of donated goods in the same way they can on cash.

The association wants a system that allows people who donate items to sign a declaration saying those items sold up to a set amount are eligible for Gift Aid. In order to claim back tax under the current system, charities must confirm with donors in writing how much donated items are sold for.

"The problem is that donors must know exactly how much they are giving before they can confirm that Gift Aid applies," said Lekha Klouda, executive secretary of the association.

"We think donors could tick a box saying they are UK taxpayers so that the charity could claim Gift Aid on, say, up to £100. This would save a lot of time and effort."

Pesh Framjee, an auditor with financial services provider Horwath Clark Whitehill, said many donors contributed goods worth only a few pounds and that collecting Gift Aid from them was not worthwhile considering the administration that would necessarily be involved.

"This change would allow charities to sweep up the Gift Aid from small donations," he said. "There should be no technical reason why this isn't acceptable."

The Treasury had not responded before Third Sector went to press.

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