The Charity Retail Association said it has developed new guidance with HMRC to tighten the monitoring of retail gift aid without imposing new burdens on charities.
A statement by CRA said it became involved in negotiations after HMRC proposed to introduce guidance that threatened to burden the charity retail sector with “additional administration” and the potential to “significantly reduce the level of gift aid claimed from the sale of donated goods”.
But according to CRA, nine months of negotiations between the two led HMRC to review its proposed guidance and “tighten the monitoring regime of the gift aid system, without imposing new and onerous burdens on charities, donors and shop staff and volunteers”.
The CRA said new guidelines include the elimination of the need to repay gift aid for donors who notify charities that they are not a taxpayer - although charities must ensure that gift aid is not claimed on any future donations.
The guidance also recommends an industry-standard training package for operating all aspects of gift aid, to be endorsed by HMRC and made available to all CRA members in 2016.
Interim CRA chief executive Steve Biddle said he was “pleased” that HMRC “listened to our concerns and agreed a new and stronger system which will work for donors and charity shops alike”.
“As part of the gift aid system retail gift aid is of central importance to our members,” he said.
“As a tax relief, we believe retail gift aid contributes to the government’s stated goal of growing a supportive environment for philanthropy and volunteering by allowing individuals to contribute to the cause of their choice in a tax effective manner.”
Nearly £80m was raised through retail gift aid in the last financial year, representing nearly 30 per cent of the charity retail sector’s total profit, according to CRA.
The CRA said it will produce an industry-standard training package for operating all aspects of Gift Aid. The package will be developed in collaboration with HMRC and available next year to its members.
