Ian Gledhill HMRC (Charities) Bootle Compliance Manager

1. Ian GledhillHMRC (Charities) BootleCompliance Manager

2. 2000/2001 25,100 Charities claimed £221.5 million Gift Aid Repayment claims • 2010/2011 • 85,000 + Charities claimed over £1 billion

3. Key requirements of Gift Aid remain unaltered • Donations from an individual must be a sum of money • The individual must be a UK Taxpayer. • A Gift Aid declaration must be held • There must be an audit trail linking the donor to the charity’s accounts

4. Requirement 1 - Tax payer • Individual must • be a UK taxpayer, and • have paid sufficient tax to cover the claim made to HMRC (Charities)

5. Individual donor may be: • Resident, or • Non Resident • But must have paid sufficient UK tax Residents of Isle of Man/Channel Islands/ Republic of Ireland are Non Resident for UK tax purposes

6. That tax can be • Basic rate (currently 20%) • 20% rate (rate deducted by Banks/Building Societies) • 10% rate (non repayable tax deducted from dividend payments) • Capital Gains Tax

7. Declaration Requirement 2 - Gift Aid declaration Declaration must contain • Name of charity • Name of donor • Donors home address • Description of payment(s)* • Declaration that payment(s) are Gift Aided • Note explaining that the individual must have paid sufficient UK income or capital gains tax to cover the claim

8. Declaration Gift Aid declaration Declaration must contain • Name of donor • Ideally, we would like to see:- Mr John Smith • We will however accept the following combinations:- • John Smith J Smith Mr J Smith. • We will not accept:- • Mr Smith Smith John

9. Declaration Gift Aid declaration Declaration must contain • Donors residential address

10. Addresses on GADs (i) YES  • 11, HD8 9QA or Dunroamin, HD8 9QA • 11, Park Street, Goole, HD8 9QA • 11, Park Street, Goole • 11, Park Street, HD8 9QA

11. Addresses on GADs (ii) NO × • 11, HD8. • Park Street, Goole, HD8 9QA • 11 Park Street. • c/o Yates Wine Bar, Park St, Goole

12. Declaration Gift Aid Declaration For a Declaration to take effect, the donor must be made aware of the tax implications. • Usually there is a note explaining that the individual must have paid sufficient UK income or capital gains tax to cover the claim. • HMRC strongly recommend that this is present on the declaration form.

13. Oral Declarations • Face to face • Over the telephone

14. Oral Declarations (first leg) • Obtain full name and address • Confirm that the donor wants the donation to be treated as a Gift Aid donation • Explain that must pay sufficient Income and/or Capital Gains tax • This information can be digitally recorded by the charity

15. Oral Declarations (second leg) If not digitally recorded charity must send donor written confirmation of the oral declaration This confirmation must contain; • Name and address of the donor • Confirmation that donation to be treated as a Gift Aid donation. • Explanation that must pay sufficient tax • The date oral declaration was given • 30 days from date of written confirmation to ‘opt out’ of Gift Aid.

16. Retention of Declarations • Should be kept for a period of 6 years after the last donation. • Must be available for inspection • Can be retained as a scanned document

17. Audit trail Audit trail from each Donor: Through the Charity’s books & records and then into the Charity’s Bank account

18. Gift Aid - Museums • Audit trails:- • Cheques • Direct Debits • Cash • Credit/Debit Cards • Admissions • Tesco Vouchers – Not Accepted

19. Donations attracting right of free admission • Statutory relaxation in donor benefit rules to view property preserved, maintained kept or created by a charity • Must be in pursuance of its charitable purposes • The right of admission applies to the donor and one or more members of family

20. Donations attracting right of free admission • Donation must be at least 10% more than the normal admission charge(s) Or • Donation allows the right of admission for a period of at least one year.

21. 10% More Than Admission Price • Visitors should have a clear choice whether to pay the admission price or make a donation of at least 10% more. • Signs should clearly show both amounts. • If visitor agrees to pay donation amount, then Charity can enquire into Gift Aid.

22. 12 Months Admission? • Charities do not have to be open all year or every day to grant a right of admission for a period of a year or more. • Gift Aid can apply as long as the right of admission is available to donors at all times when the property is open for viewing by members of the public. • Charities may, however, specify up to five days per year when the donors’ free or reduced rate right of admission will not apply.

23. Gift Aid - Museums • Family Groups • Family Tickets • Wording on the Gift Aid Declaration

24. Reciprocal Arrangements • Gift Aid can apply to qualifying donations which grant a right of admission to the property of more than one charity as long as there is an equivalent right of admission granted to donors who opt not to make a Gift Aid declaration.

25. What is a benefit? • any item or service • provided by the charity or a third party • to the donor or a person connected with the donor • as a consequence of making the donation

26. Gift Aid donor benefit limits Amount of donation Value of Benefits £0 - £100 25% of the donation £101 - £1,000 £25 £1,001 - £50,000 5% of the donation From 6 April 2011;The maximum limit for a series of benefits given to a donor was increased to £2,500 per tax year (previously £500 per tax year)

27. Membership Subscriptions • Membership subscriptions are not Gifts • Prior to 6 April 2000 paid under Deed of Covenant • HMRC will accept Membership subs as gifts if; 1. The payment does no more than secure membership of the Charity. 2. The payment does not secure a right to personal use of any facilities or services provided by the Charity.

28. Membership Subscriptions • Family Memberships can be Gift Aided - provided the subscription includes membership for the donor • Paying other people’s membership cannot be Gift Aided because although payment is to the Charity - Gift is to made to the member whose subscription has been paid. • Periodic Newsletters, attending meetings and visiting the work of the Charity - not benefits

29. Sponsorship (and Aggregated Claims) Gift Aid claim – simplified procedure Participant Date of Payment Total Donation Received Stan Smith 19/05/06 £50.00 Andrew Kayley 21/05/06 £39.00 Jane Brown 28/05/06 £72.00 R68(NGA)

30. Budget 2008 – aggregated claims • It is now possible to allow smaller donations of no more than £10 each to be aggregated up to a total of £500 within claims. • 4 donors have each made 12 monthly donations of £10 by standing order. Total donations = £480. • This treatment does not extend to donations larger than £10, any collection where there are no declarations, existing arrangements for sponsored events and day admissions to charity visitor attractions

31. NOT Gifts • The purchase of books, jumble sale items, bedding plants, food, alcohol etc • Admission to events e.g. concerts, recitals etc. • Golfing fees, Day Trips, Transport etc. • Fees to adopt / re-home an animal • Raffles, lottery tickets & 200 Clubs • Hire of own premises

32. Charity Dinners • The purchase of a ticket for Fund-raising Dinner / Charity Ball is not a Gift. • Ticket costs £100 (includes £50 donation to Charity) - not a Gift. • Ticket costs £50 & a donation of £50 is required - not a Gift. • Ticket is £50 & a ‘suggested’ donation of £50 is requested - could be a Gift?

33. Prevention is better than cure • HMRC can help in the auditing & testing of new systems and procedures • HMRC can audit claims prior to repayment • Charities should carry out own assurance checks on claims • HMRC can assist charities who identify a problem with their claims • Explain Gift Aid to fund-raising staff, Treasurers etc.

34. Gift Aid small donations scheme From April 2013; Charities & CASCs that receive small donations of £10 or less will be able to apply for a Gift Aid style repayment without the need to obtain Gift Aid declarations for those donations The total amount of the small donations will be capped at £5,000 per annum = a tax repayment of £1,250 per year Charities will need to have been recognised by HMRC for Gift Aid for at least 3 years

35. Which types of donations will apply • Collection Boxes • Bucket & Street Collections • Church ‘Open Plate’ Giving • £10 cash, cheque, Standing Order, debit card or credit card payments • Identifiable and unidentifiable donations New legislation will be required in 2012

36. Gift Aid: on line filing In 2012-13 HMRC will introduce a new online system for charities to register with HMRC as a charity and to make Gift Aid claims In preparation for this, new ‘intelligent’ forms have been produced by HMRC including a new Charity application form and an R68i claim form These include automatic checks to improve the accuracy of the forms received by HMRC

37. New Gift Aid Forms New Charity Application Form – ChA1 New Charity Variations Form – ChV1 Change of Authorised Official Change of Bank Account Change of Address. Nomination of Collecting Agent/Nominee Change of Responsible Person.

38. Gifts of Art The Government is considering introducing a tax reduction scheme for taxpayers who give a work of art or historical object of national importance to the State HM Treasury published a consultation document on 29 June – comments by 21 September 2011

39. Time Limits for claiming Gift Aid • A charity which is a Company for tax purposes must make any claim within 4 years from the end of the accounting period to which the claim relates. • A charity which is a Trust for tax purposes must make any claim within 4 years of the end of the tax year to which the claim relates.

40. Need more information?

41. Further Advice Telephone 08453 02 02 03 HMRC (Charities) Help Line Gift Aid, Charity Tax returns, VAT queries, Trading & Community Amateur Sports Clubs (CASCs)

42. Website www.hmrc.gov.uk E-mail Charities@hmrc.gov.uk

43. Any Questions?