New time limits for gift aid

Finance | 27 Nov 2009

The Finance Act 2008 introduced changes to bring in line the various time limits for assessments and claims under VAT, corporation tax, capital gains tax and income tax.

The good news is that HMRC will only look back to the previous four years when conducting a gift aid audit or inquiry, instead of six years.

The bad news is that charities will only be able to make gift aid claims on donations for the previous four years, and not up to six years as before. Claims relating to any accounting periods ending in the two years to 31 March 2006 must be made by 31 March 2010. The new time limits come into force in April 2010.

Time limits for charitable trusts differ slightly to those for charity companies and community amateur sports clubs (CASCs). For trusts, a gift aid claim must previously have been made within five years from 31 January following the tax year, 5 April. Claims will now have to be made within four years of the end of the tax year (with transitional provisions for claims relating to the year ended 5 April 2005).

Illustration of the new time limits for charitable trusts

Charitable companies (and CASCs) time limits are four years (previously six) from the end of their accounting period. In most cases, this is the charity’s financial year-end.

Illustration of these limits, including the transitional changes, for charitable companies (and CASCs) with a December year-end .

Note: time limits for transitional relief remain unchanged (two years). Transitional relief remains at 2 per cent on donations received until 5 April 2011.

Directory: HM Revenue & Customs (HMRC)

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