HMRC is rejecting more Gift Aid registration applications, accountancy firm claims

UHY Hacker Young says figures obtained under Freedom of Information Act show that HM Revenue & Customs is tightening up because of new anti-fraud measures and tight public finances

HM Revenue & Customs
HM Revenue & Customs

Organisations trying to gain recognition as charities for tax purposes are increasingly likely to have their applications delayed or unfairly turned down by HM Revenue & Customs, according to a firm of accountants.

UHY Hacker Young obtained figures from HMRC following a request under the Freedom of Information Act.

The figures revealed HMRC refused or returned an average of 92 applications per month from organisations attempting to register for Gift Aid in April and May 2011.

By contrast, tax officials refused or returned an average of 21 applications per month for the period between November 2010 and April 2011.

Charities received more than £1bn in Gift Aid in the financial year ending April 2011. To benefit, they need to gain recognition from HMRC. This is a separate process from registering with the Charity Commission.

Mark Giddens, a partner at UHY Hacker Young, said HMRC did not have "sufficient numbers of experienced staff to adequately carry out these checks without rejecting and delaying genuine applications".

Giddens said HMRC was adopting a tougher stance on applications because of new anti-fraud regulations.

"Gift Aid costs the Treasury hundreds of millions of pounds a year, so it’s perhaps not surprising that – given the state of the public finances – HMRC is scrutinising applications with greater zeal," he added.

A spokesman for HMRC said Hacker Young’s interpretation of the figures was misleading. Only around 17 applications were actually refused per month, which represented less than 2 per cent of all applications.

He said a large proportion of application forms were incomplete and HMRC had returned them to charities asking for them to be re-submitted with the correct information.

The spokesman added: "Overall, charitable applications have increased, so HMRC has recruited extra staff to help speed up the process, and ensure that our anti-fraud checks are applied.

"HMRC aims to respond to 80 per cent of applications in 30 days, and are working hard to improve turnaround times."

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