The Treasury has begun its consultation on changes to the Gift Aid donor benefits rules.
It announced a review of the rules in its Autumn Statement 2014, to consider whether the existing rules could be simplified. The consultation document invites stakeholders’ views on possible simplifications of the existing rules, and follows the government’s call for evidence, which ran between July and October 2015.
It invites respondents to submit their views on a number of options, and asks whether they represent a welcome simplification of the existing donor benefits rules.
The deadline for responses is 12 May 2016.
The proposed simplifications are:
• Reforming the relevant value test (simplifying the current monetary thresholds used to determine the amount of benefit that can be given for a Gift Aided donation).
The document suggests:
a) Removing the monetary thresholds altogether: by calculating instead the ‘net’ amount of donations on which Gift Aid can be claimed by deducting the cost of providing Donor Benefits from a charity’s gross donation receipts, or by reforming the rules so that Gift Aid can only be claimed according to the split payments rule.
b) Alternatively, the document proposes reducing the number of thresholds from three to one. The remaining threshold would be expressed in terms of the value of the benefit as a percentage of the associated donation, up to the prescribed maximum aggregate benefit value. Providing the value of the benefit did not exceed that percentage threshold, and complied with the aggregate value test, Gift Aid could be claimed on the entire value of that donation.
• The introduction of a disregard for low value benefits
A low value disregard would enable Gift Aid to be claimed on the gross value of an eligible donation as long as the total benefits provided to the donor in consequence of that donation did not exceed a certain monetary threshold. Any type of benefit could be given, provided that the stated monetary threshold was not exceeded.
• Withdrawing the lifetime benefits concession
Responses to the Call for Evidence suggested that charities do not use the lifetime benefits rule, which states that, for the purposes of Gift Aid, the value of lifetime benefits only needs to be included in the total value of benefit given to a donor for the first 10 years. As a result, the government is proposing withdrawing this concession altogether.
The consultation document is available here: https://www.gov.uk/government/consultations/simplifying-the-gift-aid-donor-benefit-rules-consultation
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