HM Treasury publishes outcome of Gift Aid forum

Justine Greening MP, Economic Secretary to the Treasury, has now published the Coalition Government’s response to the Fanning Report which was produced following the deliberations of the Gift Aid Forum:

 >> View the full response here <<

The Forum was set up with the remit of considering how structural and process improvements to Gift Aid may increase giving to charity. Kevin Russell, Stewardship’s Technical Director, who sat on the Forum said:

“The Forum debated a wide variety of issues and, with such a diverse sector, it was never going to be possible to satisfy everyone’s interests. However, both HMRC and Government are now much better informed as to where improvements can be made to ensure the continued success of Gift Aid in the 21st Century. There is a real openness to working together to see charities succeed in what is a very difficult economic climate.”

The Government have indicated that they wish to take forward the following recommendations:

• Recognition that Gift Aid is a success. As part of this, the Government will look, with the sector, to ways to raise awareness of Gift Aid, particularly among donors and to improve the knowledge and capability of charities. For example, by tax professionals donating skills and time to help charities benefit from Gift Aid.
• HMRC to move quickly on recommendations where Guidance can be improved or clarified. This to include oral declarations, split payments and sponsored events.
• Recognising the potential benefits for both HMRC and for charities, HMRC are to consider the viability of offering online filing of Gift Aid claims.
• Whilst not able to fund a Gift Aid Declarations database, the Government are keen to encourage the sector on such an initiative, including ensuring that any development meets legislative and audit requirements.
• HMRC will launch new ‘intelligent’ gift aid forms for charities in the New Year. These are expected to comprise the R68i claim form, the form ChA1 enabling charities to register with HMRC for the first time and form ChV1 which enables charities to advise HMRC of important changes in personnel.
• HMRC to examine proposals for higher rate taxpayers to be able to redirect their gift aid tax relief to charities.

The Minister confirmed that Transitional Relief will not be extended beyond April 2011. Instead, the £100m Transition Fund announced as part of the Comprehensive Spending Review will provide more targeted support to the charities that need it most.

Proposals that the Government will not be taking forward:

• Application of gift aid to money equivalents, such as donated goods and expenses.
• Bringing payroll giving within Gift Aid.
• Permitting couples to claim Gift Aid, when only one of them donates on behalf of the couple.

A Charity Tax Forum will now be established, with wider membership, to consider charity tax issues, covering not just Gift Aid, but other matters including VAT. The new Forum will play a role in progressing recommendations to be taken forward by the Government.