Rules relaxed on Gift Aid donations by phone and web

Howard Lake | 9 October 2005 | News

The Chancellor Gordon Brown MP has announced that from next month charities will no longer have to secure written consent from donors giving by telephone or online in order to claim Gift Aid tax back on their donations.

Speaking in Edinburgh on Friday at the The Scottish Catholic International Aid Fund conference, the Chancellor acknowledged that giving by telephone and Internet was becoming increasingly popular and that the rules needed to be relaxed. “It is in recognition of the extent of immediate giving by phone and internet”, he said, “that we are making it easier for donations to… all charities, even when made by telephone, to attract tax relief and thus extra money for the cause.”

From 1 November 2005 HM Revenue and Customs will remove the requirement on charities to write to each individual donor to confirm that Gift Aid can be claimed following their telephone donation. However, charities will still need to maintain satisfactory records linking the donor to the making of a declaration.

The current criteria for a qualifying donation state that the donor must make an “appropriate declaration”, and the current regulations “The Donations to Charity by Individuals (Appropriate Declarations) Regulations 2000” set out the requirements for such declarations. Where a declaration is given orally, such as over the telephone, the current regulations require the charity to send a written statement to the donor giving them a 30-day period within which to cancel the declaration.

According to HM Revenue and Customs, the provisional figure for Gift Aid donations in 2004/05 is £2,213 million, net of tax. A further £625 million in tax was paid to charities on these donations.

The change in Gift Aid rules was initiated following the public response to the South Asian tsunami disaster of December 2004. Ironically it will not come fast enough for the current emergency appeals for northern Parkistan and India following the earthquake at the weekend.

While this development made front page news in The Times last Saturday, some fundraisers have suggested there could be a hidden cost to charities in adhering to it. Will the ‘satisfactory records’ that need to be maintained in the case of a telephone donation be audio recordings of the donation being made? If so, then charities or their agencies are going to have to start storing, managing and retrieving vast banks of audio data for several years. It is to be hoped that a documentary record of the transaction will satisfy HM Revenue and Customs.

About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale. He is the founder of Fundraising Camp and co-founder of GoodJobs.