Important clarifications from HMRC on Gift Aid and data

In March 2019, CTG co-ordinated a meeting between HMRC officials and charities (members of the Gift Aid working group) to discuss data issues relating to Gift Aid.

Charities reported that the existing Gift Aid guidance in “Chapter 3” was not always sufficiently detailed to deal with all scenarios that they encounter.  This had sometimes led to charities receiving conflicting advice from HMRC and/or taking a conservative view of what to include in a Gift Aid clam in the absence of prescriptive advice from HMRC. HMRC officials stressed that their intention was not to discourage charities from claiming Gift Aid where it was reasonable to make a Gift Aid claim.Encouragingly, officials have also stated that they are “always striving to maximise charities eligible revenue through Gift Aid, taking a sensible approach where guidance may not be clear to charities”.

While we understand that HMRC Gift Aid guidance is due to be reviewed, in the short term constraints on HMRC resources may make this difficult. It was therefore agreed that a note of the meeting would be published on the CTG website, with a list of FAQs likely to follow.

CTG-HMRC Gift Aid data meeting (8 March 2019)

The note provides some very helpful clarifications on issues including (summary answers below but read the note for full detail and context):

  • When can you repair data collected on a Gift Aid Declaration? The most important thing is to have the correct information. Original declarations should be maintained but records can be updated so long as there is a clear audit trail and the changes can be demonstrated to officials if reviewed.
  • What is an acceptable home address? If a home address has been requested it should in most cases be fine to accept this where this could reasonably be the case – the onus is on the donor to provide the correct information and notify the charity if this changes. In some cases further investigation may be needed, but this should be proportionate. Types of addresses that could be residential addresses included pubs, care homes, houseboats, caravan parks, B&Bs (and other temporary accommodation), other tied accommodation etc. It would make sense for charities to provide more scrutiny of higher value claims and where possible ask specifically for a “home address” on a Declaration.
  • What about foreign addresses? Foreign addresses (including Channel Islands and IOM) are permissible for Gift Aid claims so long as the donor has paid sufficient UK tax to cover the claim. BFPO addresses are also fine.
  • What if there are multiple people at same address with different surnames? Declarations from donors with a different surname at the same address does does not preclude a valid Gift Aid claim.
  • How should we treat donations from joint accounts? HMRC would accept a cheque from a joint account even if the non-donor has signed the cheque providing there is a GAD in place for the donor.
  • What if the lead participant for a sponsorship event is a child? Where it would not be appropriate to name the child, the charity could
    include the headteacher’s name.
  • Can we accept different Gift Aid Declarations with the same handwriting (e.g. the same person completing a sponsorship form on behalf of a group)? Yes as long as the individual donors have understood the requirements of Gift Aid and confirmed that they are eligible.
  • Can we claim Gift Aid on sponsorship forms with ditto marks? Yes!
  • What if a donor has used a cross instead of a tick on a Gift Aid form? HMRC has agreed that a cross to indicate Gift Aid can be claimed even where the statement says a tick.

In many cases charities may have been acting too cautiously and missing out on valid Gift Aid claims. We encourage all charities to review this note and their processes to see if additional claims can be made, both relating to the past and going forward. If you are able to make additional claims as a result, please let us know at [email protected].

HMRC has also provided updated details about common errors on Gift Aid claims and a summary of frequent queries to the Charities Helpline.