Government unveils new rules on Gift Aid benefits

The Government has published the long-awaited outcome of its Gift Aid donor benefits rules consultation, which it published in 2017.

HM Revenue & Customs (HMRC), which is presiding over the changes, said it hopes the proposed reforms will make it easier to claim Gift Aid on eligible donations and increase the overall number and value of eligible claims.

Under the current regime, donors can claim a maximum benefit of 25p for every £1 they give for the first £100, then £25 on donations up to £1,000, then five per cent on all donations up to £2,500.

However, the new rules will simplify the tapered benefit system, so that donors can claim a maximum of five per cent benefit on any donation between £100 and £2,500. Relief on the first £100 will remain unchanged.

The reforms are due to come into effect from April 2019 as part of the Finance Bill 2018/19.

“The Government’s plans to simplify the relevant value test and bring into legislation four ESCs concludes its review of the donor benefit rules. This follows extensive consultation with the charity sector. Replacing the current rules with a two threshold system operating on a cumulative basis allows charities to offer benefits worth up to 25 per cent on the first £100 of a donation, plus five per cent of any additional amount donated,” HMRC said in its consultation response.

Commenting on the outcome, a spokesperson for the Charity Finance Group (CFG) said: “Change in the right direction, however modest, is always to be welcomed. We urge the Government to not stop at modest amendments but to go further to simplify the system if we are to close the gap between gift aid claimed and gift aid eligible on donations.”

Gill Freeman, General Practice Partner at Milsted Langdon, said: “Charities need to be aware of these important changes to Gift Aid, which are due to take effect in less than a year’s time.

“Charities should seek expert advice in order to determine how they can best benefit from the scheme.”

To find out more about how Milsted Langdon can help, please contact Gill at or by calling 01935 383500.

Posted in Charities.