HMRC updates Gift Aid guidance for charities

HMRC has issued revised guidance for charities on how the tax system operates, Gift Aid compliance and details about compliance with the General Data Protection Regulations (GDPR) when it comes to donor records

The guidance covers how to register a charity for tax, direct tax obligations of charities and any reliefs or exemptions available.

The following information has now been included:

• 3.6 Gift aid declarations: paragraph 3.6.6 explains that a charity may want to add more information and notes of its own on a declaration form. For example, the inclusion of any GDPR compliance notes that the charity feel is needed.

• 3.7 Recording and audit of Gift Aid declarations: para 3.7.1 explains that HMRC is required to ensure that any tax repaid to a charity is properly due and correctly calculated.

HMRC does this by carrying out inspections to check that Gift Aid claims are made for the correct amounts and are backed by valid Gift Aid declarations and clear audit trails for the donations received.

A charity must maintain a clear auditable record of declarations and of the making of those declarations, so that it is able to demonstrate that a donor has in fact made an appropriate declaration.

Examples of what HMRC is likely to accept as evidence includes:

  • written declaration made by the donor or a ticked box confirmation by the donor that they wish Gift Aid to apply to the donation;
  • an audio recording of the making of a declaration by the donor or an audio recording of the donor confirming a declaration where the declaration is pre-recorded by the charity;
  • a computer record of a declaration template filled in by the donor and containing a link to the donors banking details;
  • an emailed copy of a declaration;
  • a computer ‘screen print’ of the declaration sent to the charity;
  • a scanned image that’s an exact replica of a declaration;
  • a copy of a mobile phone text message confirmation of a declaration; and
  • confirmation that a donor has been sent a written record confirming their oral declaration.

HMRC will not accept a transcription of a telephone call which records the declaration given by donors into a database as it says that an auditable record does not demonstrate that the donor made the declaration.

Section 3.7.2 informs a charity how to be to be compliant for Gift Aid audit purposes and stresses that the charity should take into account any GDPR obligations.

3.9 Further information on the contents of the Gift Aid declaration has also been clarified.

Para 1 explains the amount of detail needed on a Gift Aid declaration, including the donor’s name and address. HMRC recommends that charities ask donors at regular intervals, possibly every two years, to check the personal details held and that any request like this would have to be GDPR compliant.

HMRC Charities: detailed guidance notes on how the tax system operates updated 31 July 2018


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