What does HMRC’s new Gift Aid declaration mean?

3 mins

HMRC has been consulting on a new model Gift Aid declaration for some time now – it was part of the Gift Aid reforms consulted on in the Summer 2013. 

The first draft of a new model declaration was proposed then and has been the subject of considerable debate with HMRC ever since.

What’s good?

The good news is that the wording is much shorter as it has removed references to VAT and Council tax. 

Further good news is that we understand there will be no need to update existing declarations – Whether they are one-off’s or enduring donations. 

What’s bad?

There might however be some negative ramifications regarding the wording, which refers to the implications on the donor if they do not pay enough tax. This might confuse or concern the donor and therefore they may not sign the declaration. 

What does the new declaration look like?

The new model declaration announced by HMRC on 22 October 2015 is: 

 

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

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 the current 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

Please notify the charity if you: 

  • want to cancel this declaration 
  • change your name or home address
  • no longer pay sufficient tax on your income and/or capital gains

If you pay Income Tax at the higher or additional rate and want to receive the additional tax relief due to you, you must include all your Gift Aid donations on your Self-Assessment tax return or ask HM Revenue and Customs to adjust your tax code.”

 

Our understanding is that the new wording will be required to be used for new declarations signed after 6 April 2016, so this gives little time for charities to prepare.

For more information from the HMRC on the single donation wording click here.

And, for more information from the HMRC on the multiple donation wording click here.

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