Government donor benefit review to cover Gift Aid on membership and entrance fees

The review will now consider the rules for charities claiming the tax relief, according to today's Autumn Statement

Gift Aid
Gift Aid

The government will extend its review of donor benefit rules to look at charities that claim Gift Aid on membership and entrance fees, it has announced in today’s Autumn Statement.

The statement, presented by Chancellor George Osborne, also confirmed the government’s commitment to legislation that would allow intermediaries to have a greater role in administering Gift Aid.

The Charity Tax Forum, an HM Revenue & Customs-sponsored forum of charities, advisers and other stakeholders, formed a sub-group on the donor benefit rules – the provision of gifts or other benefits to donors in return for their donations – in January.

In March, Osborne’s Budget committed to this review, saying the government would seek to simplify the rules. At its conference in April, the membership body the Charity Tax Group presented a discussion paper on potential reforms that it had prepared in collaboration with HMRC. Feedback on this has been submitted to the forum.

Osborne’s statement today says: "The government will continue and extend the review of donor benefits launched at Budget 2014 to include consideration of the rules for claiming Gift Aid on membership and entrance fees. An update will be provided at Budget 2015. The government will also work with the sector on updating the guidance and making it easier to understand."

In response to the statement, a spokesman for the CTG said: "Officials have also confirmed that they are open to considering specific proposals put forward by CTG, including the revalorisation of the benefit thresholds. CTG understands that there will be a review of membership schemes to ensure that there is parity of treatment across the sector: we would welcome this as long as existing reliefs are protected."

Separately, the statement confirmed that, as announced in last year’s Autumn Statement, the Finance Bill 2015 will include measures to allow intermediaries a greater role in administering Gift Aid. It is expected that this would include online giving platforms. The bill is due to be introduced early next year, according to a spokeswoman for HM Treasury.

The Autumn Statement also announces that the level of earnings at which people start paying income tax will rise by £600 to £10,600 in April 2015. This means that donors earning between £10,000 and £10,600 in a year will no longer be eligible to claim Gift Aid on charitable donations.

Neither the speech nor the statement made any mention of the Gift Aid Small Donations Scheme, which lets charities claim Gift Aid-like relief on small cash donations totalling up to £5,000 each year without needing to supply individual paperwork.

The scheme was introduced in April 2013 and a review was scheduled for 2016, but after a slow take-up in the first year of operation, the CTG and other umbrella bodies have called for this review to be brought forward.

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