Changes to Gift Aid donor benefit rules announced

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Changes to Gift Aid donor benefit rules announced

Chancellor Philip Hammond has announced changes to the rules about how much benefit charities can give to donors and still claim Gift Aid in today’s Budget.

There are currently three thresholds governing how much benefit donors can receive from charities before their donations are no longer eligible for tax relief.

The current systems allows charities to provide 25 per cent of £100, then £25 of benefit on donations up to £1,000, then 5 per cent of the total above that, up to a maximum of £2,500.

Now Hammond has scrapped the middle threshold to create a two-threshold system.

This means the same rules apply to donations up to £100. But for all larger donations, charities can provide 25 per cent of the first £100 plus 5 per cent of the rest. The maximum threshold will remain at £2,500 of benefit.

Hammond also announced that all existing extra-statutory concessions around issues such as admission to property, the lifetime value of donations, and the provision of literature will be legislated.

The changes will come into effect from April 2019, with draft legislation due to be published next year.

The Charity Tax Group (CTG) welcomed the changes, which it had lobbied for in an HM Revenue & Customs and HM Treasury consultation last year.

CTG chairman John Hemming said: “This will help to avoid the problems of the cliff-edge effect that many charities currently face and which can lead them to not claim Gift Aid at all.

“We now look forward to co-ordinating the sector’s efforts to revise the guidance on the donor benefit rules.”

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