Alerts from HMRC

There has been some helpful clarification from HMRC on how to deal with those folk who aren’t Gift Aid donors and are storing up their regular giving envelopes for when they next return to church.

For example, if a regular cash donor put £200 cash in an envelope and marked it as 10 weeks of £20 weekly donations for the occasions on which that person had been unable to make a regular cash offering in church.

When this was raised with HMRC, they responded:
‘In respect of [the Scheme], guidance on the eligibility for donations for inclusion … is clear in stating that claims can only be made on cash donations of £30 or fess; and contactless card donations of £30 or less collected on or after 6 April 2019. The decision over what constitutes an eligible donation is one for the church/charity to make for themselves, rather than for HMRC, but the conditions for something to be considered a “small donation” are clearly set out in legislation. Where it is the case, for example, of separate donations being given in a single envelope, then if the church/charity official is happy these are clearly separate “small donations” (and clearly stated as such) then they will be eligible for GASDS, as is the case where separate envelopes are used’.

It is important to ensure your records are really clear to ensure you could satisfy these requirements.

In October 2015, HMRC announced changes to the text of the Gift Aid Declaration.

So from 6th April 2016 you should have used the new wording for any Gift Aid Declaration. If you haven't, your Gift Aid claim may be invalid.

New HMRC approved Gift Aid Declaration templates can be downloaded from the panel on the right.

You didn't need to ask people who already have an existing Gift Aid declaration to complete a new one. However, you must make sure that any new declarations are on forms with revised wording.

The new wording is:

I am a UK taxpayer and understand that if I pay less Income Tax and/or Capital Gains Tax than the amount of Gift Aid claimed on all my donations in that tax year it is my responsibility to pay any difference.

The aim of the new Declaration is to simplify the wording to encourage donors to donate under Gift Aid, while still making it clear to donors that that they should have paid sufficient tax to cover all the donations which they Gift Aid. This responsibility for the donor to pay any difference if they've paid insufficient tax hasn't changed - this has always been the case. Charities are required to remind donors regularly of this requirement.

As a concession, HMRC have agreed that if you had stocks of pre-printed Gift Aid Declaration envelopes from envelope suppliers purchased before 21 October 2015, you could use these until stocks run out. However, you should have moved to the new Declarations as soon as possible.

Please see links on the right for new Gift Aid Declaration templates. Watch out for the Stewardship Matters bulletin for other Gift Aid news.

When the time limits for making claims changed from six to four years, HMRC amended their guidance stating that this four-year time limit also applied to the keeping of records. HMRC later admitted this was an error, and the guidance should not have changed - records should be kept for six years.

What does this mean in practical terms?

• If you have destroyed records based on the erroneous guidance, HMRC will not penalise you for not having six years of records, if they ask to see them.
• However, you must ensure that you keep all records from the date of this clarification (2012) onwards for six years.