HM Treasury carried out consultations earlier in the autumn to help it simplify and improve the existing donor benefit rules under the Gift Aid scheme. This process has been hailed as part of “the government’s commitment to maximise the amount of Gift Aid claimed on eligible donations”.

Gift Aid is one of the most valuable tax incentives in the UK, intended to promote charitable giving. Over £1bn of Gift Aid reclaims are paid to charities each year, making a major difference to the funding of the third sector and the charitable work which is carried out. However, not every gift to charity is eligible for Gift Aid, particularly if the donor receives benefits from the charity in return for his or her donation.

The existing donor benefit rules cover a wide range of benefits with financial caps on the value of benefits which donors can receive. Special guidance and rules are published by HMRC covering topics as varied as celebrity memorabilia, selling items at auction, priority ticket booking facilities, and invitations to donor “thank you” events.

The consultation was intended to help the government to understand how the current rules are applied, what barriers exist to maximising the use of Gift Aid, and how the donor benefit rules might be improved. We expect further information from the Treasury on the outcome of the consultation over the course of the winter, with potential changes to the donor benefit rules coming in a future Budget. In the meantime, if you have questions about the Gift Aid scheme and how the donor benefit rules could have an impact upon you as a donor, or upon your charity as the recipient of charitable donations, then contact our charities legal team for further advice.

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