Charity law specialist, Farrer & Co, have produced very helpful guidance on recent changes to the law which need to be complied with when using tick boxes to add donations to transactions or when using the ‘plus 10%’ Gift Aid on admissions scheme.
The written guidance follows on from the briefing they gave at AIM’s National Conference in June at Black Country Living Museum about some of the legal implications of the implementation of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. It applies to England, Wales and Scotland.
The new regulations need to be born in mind if your online purchasing systems offer the opportunity to give an extra donation to your charity when making a purchase (for tickets or anything else). The purchaser must consciously opt in to this extra donation. It is not sufficient to give them the opportunity to un-tick a pre-selected donation amount.
Care must also be taken with Gift Aid on admissions where the extra 10% method is used. Under this method a visitor is asked to make a donation of at least 10% extra for the cost of their admission ticket and complete a Gift Aid declaration. If they do this, the whole cost of the admission ticket and the 10% donation can be counted as a donation for Gift Aid. The visitor must be given a clear choice whether to pay the extra 10% for a Gift Aid admission or the normal price.
Farrer & Co explain the implications of the new regulations on this type of Gift Aid admission, in this extract from their full guidance note which can be downloaded from this blog via the link at the end:
Until now many charities have told donors the 10% is an ‘extra’ donation over the cost of a normal ticket. The problem is that statements which imply a division between the ticket price and a donation within a single payment risk both (a) falling foul of the Regulations, as they suggest that an “additional charge” is being levied over and above contractual consideration; and (b) characterising the payment as a “split payment” (as per 2 above), of which only the donation element will be eligible for Gift Aid.
As a result, where a charity wishes to use the Gift Aid admissions scheme to claim Gift Aid on the whole amount paid for admission to charity property, it is important to indicate to the customer that the whole amount will be a single payment which can be treated as a donation for Gift Aid purposes. However, provided this is done, and the guidance below is also followed, our view is Regulation 40 should not apply to the transaction, because (a) a different sort of ticket is being sold (one on which Gift Aid can be claimed, in contrast to one on which Gift Aid cannot be claimed) and (b) there is no “payment payable in addition”, as a single price is being paid for a single item (the ticket).
We strongly recommend you read the guidance from Farrer & Co via the link below, rather than relying on the summary in this blog!