Charities are being encouraged to claim gift aid for events cancelled due to coronavirus following new guidance from HM Revenue & Customs (HMRC).
To support the charity sector, HMRC has changed the rules so that if a charity event is cancelled due to the pandemic it will accept that where a person is due a refund for entry to the event but decides to donate this to a charity, the charity can still claim gift aid.
This is only possible where the individual does not receive a benefit from their donation, agrees that the cost of admission is a donation, and completes a gift aid declaration.
To make a gift aid claim, organisations will need to keep an audit trail, including a copy of the agreement for the donation.
To make this process simpler, HMRC has said that charities no longer have to physically refund the ticket price for the individual to re-donate.
Unfortunately, where a charity event has been temporarily postponed and not cancelled, any ticket refunds for such events are not eligible for this temporary change to gift aid rules.
Charities should now contact individuals who previously purchased admission to a cancelled event and explain that they are entitled to a refund but can donate the cost of the ticket, plus gift aid, to the charity. It should be clearly spelt out that this is a voluntary donation and they can receive a full refund instead.
As with all gift claims, charities should check the individual has enough tax to cover the donation and document communications with those who wish to donate in case HMRC wishes to make future enquiries.
If you have any queries about the gift aid process or this temporary change to the rules, please contact our dedicated charity team.