# HMRC launches further Gift Aid consultation

- Link: https://fundraising.co.uk/2016/11/22/hmrc-launches-gift-aid-consultation/
- Published: 2016-11-22T09:00:02+00:00
- Author: Melanie May

**HMRC has published the results of its consultation into Gift Aid rules and launched
a further consultation, ending on 3^(rd) February 2017.**

The government received 61 responses to its consultation, which set out its proposals
for the simplification of Gift Aid rules: the removal of monetary thresholds altogether
or reducing the number of thresholds.

However, the consultation failed to deliver a clear consensus around any single 
reform proposal. As a result, the government has stated that it does not believe
that it would be right to proceed with implementing any of the reforms proposed 
at this stage. As such, it has developed a further set of reform proposals aimed,
it says, ‘at reflecting more specifically the preferences and concerns expressed
by respondents’, and has raised further questions under the new consultation.

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The initial consultation revealed a majority disagreement with the proposal for 
removing the thresholds altogether.

Respondents felt that calculating a ‘net’ amount of donations on which Gift Aid 
could be claimed instead would not simplify the rules. Comments and concerns regarding
this proposal included that the process for notifying donors of the amount of Gift
Aid claimed in respect of their donation was not clear, and the process appeared
administratively complex. Nearly half of all respondents questioned whether donors
would be able to calculate how much of their gift would be eligible for Gift Aid
when completing a Gift Aid declaration.

The proposal for extending the split payments approach and removing the relevant
value test and aggregate value test was also not welcomed by the majority with more
than half disagreeing that this would simplify the rules.

More than half of respondents explicitly said that removing the monetary thresholds
altogether and replacing them with an alternative would not mitigate the administrative
burden on charities.

Reducing the number of thresholds from three to one received more support, with 
nearly twice as many respondents feeling that this would be a simplification as 
those who disagreed; however the majority of respondents did not express a clear
preference. More than a third of respondents also said that a single percentage 
would disadvantage those charities that are heavily reliant on small donations.

There was also significant support for moving to a percentage-based threshold system,
with almost three-quarters of respondents supporting this proposal. However, support
here was tempered hy a number of caveats including the level at which the threshold
should be set and the methods used to value benefits.

However, overall the responses showed that while both proposals received some support,
the weight of opinion is against either of them being welcomed as simplifications.

The new consultation seeks views on the following questions:

 * Would any, or all, of the three relevant value reforms – three thresholds with
   an adjustment to the upper limit for the £25 threshold, two thresholds operating
   to a ‘sliced’, or cumulative, design, or a single threshold – represent a useful
   simplification of the current thresholds? If so, which one(s)? Please explain
   why.
 * Which of these relevant value reforms do you consider would be simplest for the
   charity sector overall? Please explain your reasons.
 * Would you consider a low value disregard a welcome simplification if the government
   does not move to a single threshold but instead either retains three thresholds
   or moves to a two threshold system? Please explain your answer. In your opinion,
   what is the minimum level at which a low value disregard would be useful to charities?
   Please give reasons for your answer.

The consultation document can read in full on the [.gov.uk site](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/568219/gift_aid_consultation_response_final.pdf),
and responses should be emailed by 3rd February to: [ch*******************@**********ov.uk](https://fundraising.co.uk/2016/11/22/hmrc-launches-gift-aid-consultation/ch*******************@**********ov.uk).

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