Gift Aid: recent developments in HMRC guidance for charities

Full forenames for donors in Gift Aid claims “strongly encouraged” from 1 April

The Charity Tax Group (CTG) has reported that HMRC, having proposed that full forenames of donors should be supplied for a valid Gift Aid claim rather than a donor’s initial (the current minimum requirement), has now agreed that charities will be “strongly encouraged to provide HMRC with full forenames wherever that is practical and possible to do so” rather than this being mandatory.

HMRC has also agreed that this new approach will not be retrospective – meaning that current Gift Aid declarations will still be valid despite the absence of this information.

So, as a next step each charity should check its existing Gift Aid declarations for details of full forenames, and include full forenames for donors in its future Gift Aid claims where these are available to the charity. Charities should also consider how best to ask for full forenames from donors making Gift Aid declarations in the future, and put appropriate procedures in place to try to obtain this information. 

CTG says that it would like to hear from any charities that experience negative responses from donors to requests for full forenames, or any other difficulties experienced.

Updated HMRC guidance for charities using split payment concession rules to claim Gift Aid

Charities should note that Chapter 3.25 of HMRC’s guidance on Gift Aid has been updated. It now states that where a benefit to a donor would exceed the donor benefit limits, and the charity wishes to use the split payment concession rules to claim Gift Aid on the difference between the market value of the benefit and total value of the donation, it is necessary for:

• the benefit to be available to be purchased separately; and
• the donor to be aware of the value of the benefit at the time of donation.

and, in addition, the updated guidance emphasises that the charity needs to make sure the donor is aware of the value in respect of which the charity intends to claim Gift Aid. This is to ensure that the donor pays enough basic rate income tax to cover the claim, and to allow higher rate income tax payers to claim the correct amount of tax relief.