HM Revenue & Customs has today published new model gift aid declarations, but despite a compromise on wording, charities are concerned that donors will be discouraged from signing up.

The new declaration wording has been shortened compared to the initial draft published by HMRC in December 2013.

The new declaration has removed unnecessary references to VAT and council tax, and contains a clearer call to action which demonstrates the value of making a gift aid claim.

The Charity Tax Group has welcomed the simplification but has warned of “a chilling effect on some donors” as a result of a new passage added by HMRC.

This passage explains that if donors have not paid sufficient tax during the year to be eligible to claim, then they will be liable to pay the difference.

The wording of this has been softened since HMRC initially consulted on it back in the summer of 2013, and CTG acknowledged in a statement that this was an improvement.

‘Counter-productive’

The Charity Finance Group has also expressed concern that the benefits of simplifying the wording may be outweighed by the new warning.

Head of policy Andrew O’Brien said: “Earlier research on the declaration for HMRC found that serious deterrent messages or legal language deterred eligible claimants but didn’t have an impact on ineligible claimants.

“We are concerned that the addition of this statement may be counter-productive and see less eligible gift aid claims made.”

Prospect of invalid claims

CTG chair John Hemming said that in addition to concerns about the new passage, there are other challenges to be overcome.

He said: “More needs to be done to promote awareness of this change, to ensure that charities are compliant with the new gift aid declarations and do not face the prospect of invalid claims.

“We will also continue to work with officials to ensure that the gift aid declarations are as flexible as possible for use on digital platforms, including SMS, where take-up is still too low.”

Existing declarations remain valid

The declarations apply to all new one-off donations, multiple donations and sponsored events.

Declarations that are already in place do not need to be updated.

The full wording is as follows:

“Boost your donation by 25p of Gift Aid for every £1 you donation.

“Gift Aid is reclaimed by the charity from the tax you pay for the current tax year. Your address is needed to identify you as a current UK taxpayer.

“I want to Gift Aid my donation of £ ......... to ......... (Name of charity). I am a UK taxpayer and understand that if I pay less income tax and/or Capital Gains tax in a tax year than the amount of Gift Aid claimed on all of my donations in that tax year it is my responsibility to pay any difference.

“Title/First Name/Surname/Home Address/Postcode/Date”