Charity_TaxAgility Accountants LondonThe model Gift Aid declaration form is set to undergo an expansive improvement in the coming months thanks to the Government’s commitment to stop charities, especially small charities who are more likely to use the form, from losing out on billions of pounds worth of Gift Aid.

The National Audit Office (NAO) estimates that Gift Aid wasn’t used in donations worth approx. £2.3 billion. Though the NAO recognise that not all of these donations would have been eligible for Gift Aid, it’s a fair assumption that a vast number of them would have been.

Speaking on the issue, Exchequer Secretary to the Treasury Priti Patel said:

Gift Aid is an important tax relief for charities which helps to provide essential revenue to charitable causes. This research shows that there is more that government can do to boost eligible donations which is why we are simplifying the declaration forms to make sure donors understand when they’re eligible so that charities can maximise the financial donations they receive.

Simpler Declaration Forms

There have been a number of suggested improvements for the declaration forms, ranging from making the language of the form easier to understand by avoiding excess detail and dense formatting (breaking up information to create a more digestible read), to making a significant change to the layout of the form so to force frequent donors to pay greater attention.

It’s been suggested that the current declaration form doesn’t make the link between the tax the individual making the donation has already paid and the Gift Aid that can be claimed by the charity they’re donating to; something the upcoming improvements are sure to address.

Emma Greenwood, the head of policy development at Cancer Research UK said of the proposal:

Gift Aid is the most widely used form of tax-efficient giving in the UK, and we believe it’s hugely important. Gift Aid works best when it is simple, and we welcome the government’s commitment to simplifying the declaration form to help donors better understand the scheme.

The Government first announced their intentions to help charities receive more of the Gift Aid they’re entitled to during Budget 2014, during which they encouraged smaller charities who weren’t already registered to receive Gift Aid to sign up as soon as possible.

Chancellor Waives VAT on Band Aid Single

Chancellor of the Exchequer George Osborne confirmed last week that he is waiving VAT on sales of the Band Aid anniversary single, a re-recording of the 1984 single of the same name, with an ensemble of musicians (once again pieced together by Bob Geldof) banding together in the fight against Ebola.

Last weekend the single went straight in at number one in the UK charts, becoming the fastest-selling single of the year selling 312,000 VAT-free downloads.

Confused by Charity Gift Aid?

To speak with a professional to discuss how charitable donations must be accounted for (both throughout the year and in your tax return), contact us today on 020 7129 1199 or get in touch with us via our contact page to arrange a complimentary, no-obligation meeting.