Share

New charity shop gift aid rules will cut red tape

New charity shop gift aid rules will cut red tape
News

New charity shop gift aid rules will cut red tape2

Finance | Tania Mason | 20 Dec 2012

HMRC is to introduce new rules that will dramatically reduce the numbers of letters that charities must send to donors in order to claim gift aid on their donations to charity shops.

From next April, in each tax year, donors will be able to make a single gift aid declaration that covers sale proceeds from donations of up to £100 if the charity operates the shop directly, or £1,000 if the goods are sold by a trading subsidiary.  Donors will only need to be contacted by the charity again if income from the sale of their donated goods exceeds those amounts.

At the moment, charities must write to each donor to confirm their gift aid eligibility, every time a donated item is sold.

Charity Tax Group welcomed the announcement, saying the reduction in administration could save large charities something like £250,000 a year.

The announcement came about as a result of work carried out by an HMRC working group comprising representatives from the charity retail sector, charity tax bodies and the government.  CTG vice chairman Richard Bray said discussions were “productive and constructive” and there was “significant agreement between charities and officials”.

CTG wrote to the Economic Secretary to the Treasury earlier this month, requesting that he approve the proposal, and Bray said CTG appreciated his prompt and favourable response.

He said the move will “dramatically reduce” the number of notification letters charities will need to write to donors.

CFG chief executive Caron Bradshaw said it was “a really good step in the right direction” and added: “We hope that this consultative approach could work as a potential model for streamlining and modernising the wider gift aid system.”

Warren Alexander, chief executive of the Charity Retail Association, also welcomed the move, saying he was delighted that the governement has moved so quickly. 

"We will be working with HMRC and our members on the final details, and on ensuring that charities understand what they need to do to take advantage of the new processes and comply with HMRC requirements," he added. 

HMRC will publish detailed guidance on the new procedures in the new year.

Barry Gower
Director
GAIN Gift Aid Consultants
4 Jan 2013

I would like to think that if a donor gave an amount, regardless of whether it was as a result of the sale of goods in a charity shop, or any other method, that the charity would acknowledged this and thank them. Although the details are not finalised, the charity would need to keep records of this type of donation , if only to ensure that the amount did not exceed the maximum (£100 or £1000). Then, at the end of that tax year, the charity writes to the donor, thanks them and advises of the cumulative amount that has been donated in that tax year, and encourages the donor to include this amount on their tax return.

Note that they do not have to tell the charity anything regarding their tax status, and they do not even have to know whether or not they are higher rate tax payers. The tax system will work this out and if it turns out that they fall into this bracket, they will automatically get this as tax relief!

Valerie Morton
20 Dec 2012

So, how will this affect higher rate tax payers who curently claim higher rate tax relief on the value of sales from their donated goods? If they are not informed of the exact amount of their sales they will not be able to claim the relief. If they have to tell charities they are HRT payers it may act as a disincentive.

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Big Society has succeeded and society is stronger than in 2010, says Rob Wilson

4 Mar 2015

The Big Society has succeeded and charities have more volunteers and more funding than when the government...

Major parties commit to more support for charities delivering health and social care

4 Mar 2015

Members from all three of the major political parties said yesterday that the voluntary sector has a bigger...

Booking open for the Charity Property Conference

4 Mar 2015

The conference, which will be held on 7 July at BMA House in London, is focused on helping charities get...

Eleven per cent of Charity Commission inquiries are opened into religious charities

5 Mar 2015

Twenty three of the 201 statutory inquiries opened into charities in the year to March 2014 focused on...

Political parties and charity bodies condemn Eric Pickles' 'sock puppet' comments

4 Mar 2015

Labour and Liberal Democrat MPs yesterday denounced Eric Pickles’ assertion that charities would be...

Data is often pointless, dangerous and counterproductive says DSC chief

4 Mar 2015

Charities often spend too much time collecting and measuring data and should rely more on their personal...

Daniel Phelan dies, aged 58

13 Feb 2015

Daniel Phelan, owner and editor-in-chief of Civil Society Media, passed away on Wednesday following a...

LinkedIn launches matching service to bring charity volunteering opportunities to 250,000 members

6 Feb 2015

Charities in the UK will be able to advertise volunteer opportunities to 250,000 LinkedIn members who...

Free guide to Bitcoin donations produced for charities

5 Feb 2015

Two Bitcoin organisations have launched a website and free guide to promote the use of the digital currency...

Join the discussion

Twitter button

@CSFundraising