Gift Aid Small Donations Scheme – Have Your Say

Charity Finance Group, Institute of Fundraising and NCVO are conducting a survey of charities on the Gift Aid Small Donations Scheme in response to the government’s call for evidence. The government introduced the scheme in April 2013 with the aim of helping small charities to fundraise and to support low level fundraising initiatives such as bucket collections.

Charities that take part in the survey and complete it before the 31st January will be entered into a prize draw to win a place at CFG’s Gift Aid Conference  on Tuesday 9th February 2016 in Central London. Otherwise, the survey closes on the 12th February and can be completed here:

Gift Aid Small Donations Scheme Survey

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“The scheme has not met its original targets due to low take up by charities with tens of millions of pounds worth of funding not being claimed,” said Andrew O’Brien, Head of Policy, Charity Finance Group. “We want to find out why and would encourage any charity, regardless of whether they use the scheme, to take our survey.

AIM is keen to feedback from our members about the scheme. We would like to know if you use the scheme in your museum, gallery or heritage site – or the reasons why you don’t.  Suggestions for improvements to the scheme or examples of how you have used it would be welcomed. Please email your thoughts to:

Gift Aid donor benefits – a new beginning or the beginning of the end?

The following has been reproduced with kind permission of Baker Tilly  – an independent firm of chartered accountants and business advisers.

The donor benefit rules affect fundraising activities carried out by many charities – particularly admissions charities and those with membership or patrons’ schemes. The publication of a call for evidence now gives charities an important opportunity to contribute to the government’s review and simplification of the Gift Aid donor benefit rules.

It seems a long time since the review of the donor benefit rules for claiming Gift Aid was originally announced in Budget 2014 and then extended to include the rules on membership and entrance fees. While a lot of work has been going on behind the scenes, albeit interrupted by the General Election, the publication of a Call for Evidence on 16 July at last gives charities an opportunity to contribute to the process.

The Call for Evidence, which closes on 9 October, can be accessed HERE

The aim of the Call for Evidence is to help the government see how well charities understand and apply the current rules. It also aims to identify any barriers and problems they present to charities. As the results will be used to help formulate detailed proposals for reform that will be formally consulted on later in the year, it is important that you contribute to the debate.

Given that many of the donor benefit rules are based on concessions and practice leaving things as they are is not an option. Legally all current concessions now have to be either incorporated into statute or abandoned. It is, therefore, essential that charities contribute to the debate.

For further information please view the original post HERE

The AIM Quick Guide ‘Donation Boxes in Museums’ can be downloaded here: Donation Boxes in Museums

Report: Charity leaders ask government for a £1.5bn VAT rebate for the sector and improvements to Gift Aid

A report today by the Civil Society reveals that leaders from six umbrella organisations have urged the government to use the Budget to extend a VAT rebate scheme which would save the charity sector up to £1.5bn per year.

In last year’s Autumn Statement the government introduced VAT rebates for hospices, search and rescue charities, and air ambulances.

The letter says that there are still hundreds of millions of pounds worth of donations that are not being gift aided by donors and that there should be a campaign to revitalise the image of gift aid and provide training for ‘trusted messengers’ such as charity volunteers.

In February 2015, AIM worked with Arts Council England and Charity Finance Group to compose a letter to the Chancellor, George Osborne, stating the importance of Gift Aid to the sector and suggesting improvements to help increase the numbers of museums and arts charities that could benefit. It was co-signed by 12 bodies, representing over 70,000 organisations.

AIM actively encourages all its members to make the most of Gift Aid.

For more information on how to make the most of your donations, please download AIM Quick Guide – Donation Boxes in Museums which includes information about the Gift Aid on Small Donations Scheme.

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You can read the full report by the Civil Society here: Civil Society Article

Follow the Civil Society on Twitter: @CivilSocietyUK

*Content for this post has been sourced from the Civil Society article published today.

Gift Aid on admissions schemes still low among museums, AIM survey shows 

Gift Aid on Admissions

As many as 44% of museums who could claim Gift Aid on admissions are not doing so, AIM’s 2014 Autumn Online Survey has revealed.  This rises to two-thirds of eligible museums with under 10,000 visitors per year. 

Reasons given for not cliaming included: “Not enough visitors to justify cost of equipment”; “Scheme too complicated for occasional volunteers to administer reliably, using personal details”, and “HMRC need to make the collection and claiming of Gift Aid simpler for independent museums”.

Of the 56% of eligible museums that are claiming Gift Aid on admissions, 42% are using the ‘additional 10%’ scheme and 58% are using the ‘annual pass’ scheme.  37% of the respondents did not qualify at all, as they don’t charge for admission. 

Gift Aid On Donations

The AIM survey found 22% of museums do not claim Gift Aid on donations they receive, rising to a third of museums with fewer than 10,000 visitors p.a. All of the respondents with over 100,000 visitors p.a. claimed Gift Aid on donations.

The Museums Association (MA) have also recently published an article summarising a report from HRMC which found that £2.3bn of donations were made to charities without Gift Aid being claimed in 2012-13.

The report is entitled Gift Aid: Understanding Donor Behaviour, and has led the Treasury to announce it will simplify the Gift Aid model declaration form. The new form should be available early in 2015.

The Museums Association summarises the reasons the report gives Gift Aid not being claimed by charities:

The report found that some people were not claiming gift aid because of misconceptions about it, believing that there would be a cost to the charity or to themselves, or that it was such a negligible amount that it was not worth claiming. Others were deterred by an unwillingness to share personal information, or through a general view of form-filling as inconvenient.

The report concluded: “Changing information about Gift Aid will be central to increasing the number of correct claims, and understanding is important to decisions… the findings suggest that once a decision had been made about whether to claim, behaviour quickly became habitual and automatic. Consequently, changing Gift Aid behaviour requires a two-part process: to disrupt existing habits, and to address barriers to claiming or misunderstanding.”

The full MA article is available here: Museums are losing out on Gift Aid | Museums Association.

Members can find out more results from AIM’s survey in the December issue AIM Bulletin, plus discover how museums fared this season in terms of visitor numbers and spend per head.

Legal guidance on using tick boxes for donations and Gift Aid on admissions

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!

Farrer – Tick-box exercises Pre-selected donations, Gift Aid admissions and recent changes in consumer law

NCVO calls on government to reform gift aid small donations scheme

David Ainsworth of NCVO explains that the gift aid small donations scheme (GASDS) is not working after only a fraction of the expected amount has been claimed.

He believes the additional, complicated rules about eligibility are off-putting to exactly the small charities and museums that the scheme was meant to help. NCVO are calling on the government to act straight away to reform the scheme so more charities are eligible to use GASDS and it is more straight-forward to make a claim. AIM supports this call whole-heartedly!

Read more here: NCVO calls on government to reform gift aid small donations scheme.

Are you using the Gift Aid on Admissions scheme correctly?

The provision which allows museums and heritage attractions which are registered charities to claim gift aid on admission to their sites has been extremely valuable for those using this benefit, for many years now. However it is very important to ensure you are operating your gift aid admissions in accordance with HRMC’s requirements, as one of AIM’s members recently discovered.

The requirements are clearly explained, with examples, on HRMC’s website and it is safest to use this as your primary source of information.

The HRMC website introduces the Gift Aid on Admissions section as follows,

If your charity allows a donor the right of admission to view charity property then, providing certain conditions are met, the benefit of the right of admission can be ignored and the donation may qualify for Gift Aid.
Your charity could ask visitors to make a voluntary donation that meets either of the following conditions:

  • it is at least 10 per cent more than the normal admission fee
  • it allows admission for at least a 12 month period

The website goes on to explain in reasonably simple language how each of these option should work and provides examples.

One member contacted us recently because they had misunderstood the need for those using the ‘annual ticket’ option to give an annual ticket to all visitors, not just those who completed gift aid declarations. This was picked up by HRMC and the museum has had to pay back £3,000.

Although care needs to be take, there are hundreds of museums and attractions across the country successfully claiming Gift Aid on admissions.  They have found it to be well worth the investment in setting up the necessary systems and getting their offer right, because of the increase in core income through the gift aid reclaimed, worth 25p for every £1.

Budget 2014 – Gift Aid and Cultural Gifts Scheme

Copied below are the relevant sections from the Chancellor’s 2014 Budget relating to Gift Aid and the Cultural Gifts Scheme and Acceptance In Lieu.

Making Gift Aid easier for small charities and donors to use is welcome but difficult to comment on until the detail is provided.

The combined annual limit for the Cultural Gifts Scheme and Inheritence Tax Acceptance in Lieu scheme will be increased from £30m to £40m a year from 2014/15.

Extracts from HM Treasury Budget Report 2014

Charities and Gift Aid

2.91 Gift Aid digital – As announced at Autumn Statement 2013, the government will legislate to allow non-charity intermediaries a greater role in operating Gift Aid with further detail to be set out in regulations. (Finance Bill 2015) (aa)
Budget 2014 69
2.92 Small charities – The government will encourage more donors to use Gift Aid on eligible donations and encourage smaller charities to register for the reliefs they are entitled to. This will include targeted outreach work, a simpler joint HMRC/Charity Commission application process and improving understanding of donor behaviour.
2.93 Increase Cultural Gifts Scheme limits – The combined annual limit for the Cultural Gifts Scheme and Inheritance Tax Acceptance in Lieu scheme will be increased from £30 million to £40 million a year from 2014-15. (51)
2.94 Cultural Gifts Scheme amendments to legislation – As announced at Autumn Statement 2013, the government will legislate to ensure the Cultural Gifts Scheme (CGS) works as intended in relation to Estate Duty. The amendment will ensure that donors of objects, on which there is potentially a charge to Estate Duty, are not financially better off by donating the object under the CGS, than selling the object on the open market. (Finance Bill 2014)
2.95 Grant for air ambulance and inland safety boat charities – Following HM Treasury’s review of the VAT air ambulance charities incur on fuel, the government will introduce a 5-year grant of £65,000 per year for air ambulance charities across the UK. Following a consultation, the government will also introduce a further 5-year grant of £1 million per year for inland safety boat charities across the UK.
2.96 Charity donor benefits – The government will review benefits allowed to donors with a view to simplifying existing rules.

CAF publish Why We Give report and paper about why US style giving won’t work in UK

Charities Aid Foundation (CAF) has published “Why We Give“, the findings of research into why people give to charity. The report covers major motivations for giving, how donors think about their giving, what could encourage more giving and how much of their wealth should the more affluent give away in their life times.

The average Briton gives away £10 a month to good causes. But many people give away far, far more than that. They might not be able to muster the millions that major philanthropists can devote to the causes we all care about, but they devote thousands of pounds a year to doing good. What marks these people out? What makes them special? To find out, we surveyed more than 700 of Britain’s most generous people – people who give thousands of pounds a year to good causes through the Charities Aid Foundation (CAF). We have spoken to many of them as well, asking what motivates them to give, and what they get in return.

The factors that it was thought would  encourage more giving were:

  • More hard evidence of the impact of charities work (81%)
  • Companies doing more to support charities (78%)
  • Donors understanding existing tax breaks better (77%)
  • More generous tax breaks for donors (76%)

Arts Professional points out that the publication of Why We Give “coincides with the release of a new a CAF discussion paper Give Me a Break: Why the UK should not aspire to a US-style culture of charitable giving, which concludes that many of the factors that contribute to the success of charitable giving programmes in the US aren’t replicable in the UK and that the ‘fertile space’ for philanthropically-funded activity is much more limited.” The paper notes that tax breaks for charitable giving in the USA are weighted towards the wealthy, whereas Gift Aid in the UK enables a much larger number of people to participate in tax-efficient giving.

Major donors call for more tax breaks for giving | News | ArtsProfessional.

Interview about Gift Aid with Economic Secretary to the Treasury, Nicky Morgan

On 26th February, Third Sector reports that “HM Revenue & Customs has received something of a pasting from the Public Accounts Committee for its handling of charitable tax relief. The committee has made no less than six recommendations for HMRC to improve the way it handles Gift Aid and prevents fraudulent claims.”

Third Sector have printed an interview with Nicky Morgan, the Economic Secretary to the Treasury, who has responsibility for HMRC’s charity policies. The article says she seems unfazed by the criticisms. “We are committed to Gift Aid,” she says. “It’s worth an awful lot to charities. The committee has recommended that we simplify the rules on abuse but also that we make it easier for charities to claim Gift Aid. We have almost doubled the number of people looking at charitable tax reliefs from 50 to 95, and they found £15m of fraudulent claims in 2013. From conversations I’ve had with charities so far, they want us to make it easier to get Gift Aid. We’re on the same page as the committee.”

To read more: Interview: Nicky Morgan | Third Sector.