Earlier this year HM Revenue & Customs (HMRC) published updated guidance on Gift Aid declarations and provided new model declaration for Gift Aid forms.
The guidance was developed with the help of charity sector representatives to help ensure that charities give a full and correct explanation of the law to their donors before the donor makes the declaration.
Although the changes do not come into effect until December 31st this year, there have been a number of queries regarding these changes, which have prompted HMRC to provide clarification for charities and donors.
Donors have always had to pay enough Income Tax and/or Capital Gains Tax in each tax year to cover all their charitable donations and not just the ones they are making as they fill out a specific Gift Aid form, but from next year they will have to be clear that they understand the consequences if they don’t.
The easiest way for charities to show that they have explained the tax consequences to a donor and made sure that their Gift Aid is valid is to incorporate all that information on the Gift Aid form, although there is no requirement for them to replace their existing declaration if they prefer not to.
However, where possible, charities should seek to incorporate any additional information required under the new guidance as soon as possible, or amend their processes to ensure that staff and volunteers are providing the correct information to donors.
Charities might also like to remind donors who have made enduring Gift Aid declarations of the rules on tax to cover, perhaps through their regular mail shots.
As an accountant, Gill Freeman specialises within charity tax.