Only a quarter of charities registered for Gift Aid have signed up to the new digital system

The deadline is the end of September but only about 30,000 charities have registered so far, Charity Tax Group seminar hears

HMRC Online
HMRC Online

About a quarter of the 120,000 charities registered for Gift Aid have signed up to Charities Online, the new digital system to claim Gift Aid, delegates at a Charity Tax Group seminar heard yesterday.

Charities have until the end of September to register for the new system, which involves submitting data to HM Revenue & Customs in spreadsheet form. At that point they will no longer be able to claim Gift Aid using the old paper forms.

A transitional period has been in effect since March that allows charities to claim Gift Aid using both the old paper forms and the new electronic system.

Peter Mills, programme manager for Charities Online at HMRC, told the meeting, hosted by the law firm DLA Piper in London, that just under 30,000 charities had registered and about 25,000 had made Gift Aid claims.

He said that about 70,000 charities made Gift Aid claims every year, and that most of those made claims only once a year. In total, HMRC receives about 85,000 claims a year.

"We hoped we would have more charities signed up," he said. "But many charities make only one claim a year, and many of those made their annual claim before the transitional period ended.

"So it will be a year before they need to sign up for Charities Online."

Mills said HMRC had taken extensive steps to make charities aware of the new system, including writing to all charities registered for Gift Aid. He warned that there would be no extension of the transitional period.

"Charities that have real problems will be able to contact HMRC and will be dealt with on an individual basis," he said. "So far we’ve been contacted by seven charities."

Mills said most claims made electronically under the new system were paid in two or three working days.

He said that about 5,000 claims had been submitted under the Gift Aid Small Donations Scheme, which allows charities to claim a Gift Aid-like relief on cash donations of up to £5,000 a year, even if those donations are not accompanied by the usual declarations.

The government initially estimated that the GASDS would cost £50m in its first year.

Chris Lane, policy officer at the Charity Tax Group, said that only 45 per cent of Gift Aid claims in August were made using the new system.

"We still aren’t sure how many small charities are aware this exists," he said.

Lane said that about 1.5 per cent of respondents to a CTG survey had said they were giving up on Gift Aid, and some charities had said the transition had cost them up to £150,000.

David Ainsworth

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