New Model Gift Aid Declaration: What’s changed?
This week HMRC published a new, shorter model Gift Aid Declaration. The new declaration will apply to all donations so it’s really important to make sure that if you want to claim Gift Aid on donations in the future that the declarations you use are up to date.
Over the last few months, IoF have been involved in an HMRC-led working group to update and simplify the Gift Aid Declaration. Our members had been saying for a long time that the declaration was too long and had too many references to other forms of tax which made it harder for the donor to understand, so we hope that this new model declaration is easier to use and generates greater take up.
We know that charities and fundraisers will have questions on the new declaration, so we’ve tried to cover the main points below. If you have further questions or want more information, as well as the link to the new model declarations, we suggest you take a look at the information on gov.uk.
While charities can start using the new model declaration now, HMRC have said that charities holding stocks of printed materials, or need time to incorporate the new changes, can use the previous model declaration until 5 April 2016, but from 6 April 2016 the new declaration must be used. Incorrect declarations may result in Gift Aid claims being invalid. Declarations already in place do not need to be updated, but as before it’s really important that you keep records of declarations and Gift Aid payments whether they are written, online or verbal.
What’s different in the new model declaration?
VAT and Council Tax
This new model declaration removes references to VAT and Council Tax, making the declaration much less confusing.
Community Amateur Sports Clubs
There is a separate model declaration for CASCS and so on the model declaration for donations to charities, the references to Community Amateur Sports Clubs has been removed.
It is now absolutely explicit in the Gift Aid Declaration that the donor must pay the same amount or more of UK income tax and/or Capital Gains Tax as the charities will claim in a tax year, and that the donor is responsible for any tax shortfall. Other taxes such as VAT and Council Tax do not qualify.
Boost your donation by 25p of Gift Aid for every £1 you donate
This addition is intended to provide a positive message to communicate the value of Gift Aid and encourage donors to provide a declaration to give Gift Aid. However, as set out below, the use of this statement in your declarations is not mandatory (you can choose to not include it if it doesn’t suit your context of the fundraising material).
Still a ‘model’ declaration
For a Gift Aid declaration to be valid, it has to contain certain information. The ‘model’ declaration is provided by HMRC for charities to use and gives them certainty that the declaration will be valid. As before, charities are able to adapt the model declaration (for example to include your own branding or additional messages) as long as you include:
- the name of your charity
- the donor’s name
- the donor’s home address
- whether the declaration covers past, present or future donations or just a single donation
- a statement that the donor wants Gift Aid to apply (this could be a tick box on a written or online declaration)
- an explanation that the donor needs to pay the same amount or more of UK income tax and/or Capital Gains Tax as all charities and CASCs will claim on the donor’s gifts in a tax year and that the donor is responsible for any tax shortfall
If you’re organising a sponsored event, like a marathon, your sponsorship forms can include a Gift Aid declaration. The forms must also include the:
- amount of donations collected
- date that pledged donations were collected
- date when the sums collected were handed over to you
- gift aid