About time too
Since 2000 when Gift Aid was introduced by HMRC the declarations have got steadily longer and more complex. The argument was that individuals were confused by Gift Aid and the longer statement laid out, in more detail, what was included and what wasn’t.
By 2015 the statement was so long winded it had the opposite effect: more confusion and less people being willing to agree. However, changes are afoot. From this month (April 2016) declaration text is changing – HMRC have finally understood that simpler is better.
The new declarations can be found here https://www.gov.uk/claim-gift-aid/gift-aid-declarations. Gone is the long 6 line paragraph about income and capital gains tax but not VAT yada yada… and instead, a simple streamlined statement, broken into easy bite-size chunks.
To be honest, it’s about time. I would like to formally request that somehow I get a refund on the time I’ve spent over the last few years locked in this conversation:
Charity: “So, we need to include all of this statement?”
Julie: “Yes, all of it.”
Charity: “Surely we can leave this bit out?”
Julie: “No, you really can’t.”
Charity: “But won’t that confuse people?”
Julie: “Yes. People will be confused.”
Charity: “So we can leave it out then?”
Julie: “No you can’t.”
Cut to Charity and Julie staring off into the distance, confusion and resignation on their faces.
I’d like to see some other changes made. Here’s my list of things I’d like to change:
- Dates – can HMRC come out and clearly state what their position is on the dating of declarations. I’ve been working with one client who has years of experience and we noticed a subtle change inserted into the guidance notes. It’s about the acceptance of a date that is inferred in the declaration text and was changed sometime in 2015 (we don’t know when). If you really will accept an inferred date on older declarations let us know – you’ll save us from a whole lot of worry.
- Donations from couples – if a donation is made from joint supporters and they have given a declaration, surely it’s implicit that whilst the donation is in joint names enough tax is paid by the household to cover the Gift Aid reclaim. Older supporters very often make charity donation decisions as a couple. By being so pedantic on joint donations it’s increasing administration costs and often leads to donations made in joint names being omitted from claims.
- Raffles and Lotteries – if a charity is holding a raffle or lottery can we claim on the whole amount. Hear me out on this one – it’s a bit more complex. There is currently in place a 25% rule for other charitable products i.e. membership. If the value of the benefits in kind is less than 25% then Gift Aid can be claimed. So a membership that gives you a pin badge, a simple membership pack and a twice yearly newsletter would qualify. If that membership also gives you any type of discount that had a commercial value then it stops qualifying (this is another part of the same rule). But if the total prize pool of the raffle or lottery was less than 25% of the total income raised, couldn’t we argue the 25% rule? I appreciate this would need some constraints but I think you get my gist.
If I went through it all I’m sure I could find even more ways of how the scheme could be simplified. It’s all about understanding how practical it is to record the data in the very specific way that HMRC require and then relying on your supporters to only provide their responses in exactly that way. Any changes are unlikely to negatively increase claim value, pushing the total pot beyond the £750 million each year unclaimed (which was still being widely quoted in February 2015), it’s just going to make it easier for organisations to record the data, simplifying also increases accuracy (less room for interpretation) thus making claims easier to administer.
So HMRC, if you’re listening I’m available for a chat about this.