HM Revenue & Customs will not pay for or manage Gift Aid declarations database

HMRC believes the sector should develop an organisation to administer the records, according to Rhodri Davies of the Charities Aid Foundation

Rhodri Davies
Rhodri Davies

HM Revenue & Customs has given its backing to a universal database of Gift Aid declarations but will not pay for or look after it, according to the Charities Aid Foundation.

Officials from HMRC, the Treasury and the Cabinet Office met a group of charity infrastructure bodies last week to discuss the database – which, if established, will keep a record of donors who agreed that all donations they made to any charity could qualify for Gift Aid.

Rhodri Davies, policy manager at CAF, said HMRC had made it clear that it would not pay for or look after the database and the sector itself would probably need to develop a new organisation to administer it.

This organisation might need to be a charity in its own right, he said, and could be set up for less than £1m. Davies said the database would allow charities to check that Gift Aid could be claimed on donations without keeping extensive records of declarations from every donor.

"At the moment there are charities with hundreds of shoeboxes full of Gift Aid declarations dating back years," said Davies. "That’s the kind of thing we want to get rid of."

"The challenge is to create something outside the Treasury and HMRC that can still interact with their systems. There’s also the question of whether new legislation would be needed to set this up, because responsibility for the data would be transferred."

He said it would also work in parallel with changes that HMRC plans to introduce, which will allow charities to claim Gift Aid online. Davies said he expected it would be three to five years before work on the project was complete.

An HMRC spokeswoman confirmed the meeting took place. "Any solution might require legislative changes in order to be successful; therefore, we are engaging early on in their development of any database," she said.

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