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New Gift Aid declarations to be trialled this summer

Howard Lake | 15 April 2014 | News

New Gift Aid declarations will be trialled “in a live environment” this summer as part of the government’s drive to encourage more donors to sign up to the tax rebate.
The tests will be carried out by a ‘promotion and declaration’ working group – containing fundraising practitioners and behavourial insights experts – that aims to reach initial conclusions by this autumn.
Research conducted by the group – to be chaired jointly by HMRC and the Treasury and reporting to the Charity Tax Forum – will be supplemented by “customer closeness” work.
The measure was announced in HM Treasury’s response to the consultation it ran last summer on Gift Aid and digital giving.
However, whichever option is chosen will remain as an opt-in as the government has rejected calls to move to an opt-out system – whereby donors are presumed to be eligible to claim Gift Aid and opt out if they are not – and that the new declarations will require donors to give “informed consent”.
The government’s response to the consultation points out that 40 per cent of adult Britons are no longer paying income tax.
“It is therefore clear that any changes made to the Gift Aid declaration should be careful to increase donors’ understanding that they must have paid tax in order to use Gift Aid,” the Treasury says.
“Changes will need to address the challenge of making it easier for donors to apply Gift Aid to eligible donations at a time when the number of eligible donors is reducing, while helping to ensure that Gift Aid is not applied incorrectly to ineligible donations.”
In May 2013, the Cabinet Office’s Behavioural Insights Team published recommendations and suggestions on how behavioural insights could be applied to charitable giving, but this made no special mention of Gift Aid.

Greater role for intermediaries

The Treasury’s consultation response also states that ‘intermediaries’ – such as an online giving platforms or text-to-donate services – will take a role in collecting and passing on Gift Aid declarations to charities or other intermediaries to make the Gift Aid Claim. This will be legislated in the Finance Bill 2015, with subsequent secondary legislation to fill in the full details, including a definition of ‘intermediary’.
Secondary legislation will also allow a single declaration to cover multiple charities through a single intermediary and set out the regulatory framework for the intermediaries, which the Treasury says will be based on the regulatory regime for payroll giving agencies.

No universal database

The government said it would not establish a universal gift aid declaration database – which would have meant that donors only need to opt-in to the Gift Aid scheme once, rather than every time they make a donation to a new charity.
However, information provided by respondents would be used in “supporting longer-term thinking about the future of Gift Aid administration”.
The Treasury’s consultation – aimed at addressing barriers in access to Gift Aid when making donations through digital channels, including text and online – ran between July and September 2013 and received 100 responses.


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