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Posted 22 December 2016

Gift Aid Goes Digital

New Regulations are set to simplify the Gift Aid process for contributions made digitally and hopefully lead to an increase in Gift Aid claims.

The current process has been criticised as cumbersome and unworkable for third-party digital donation platforms (or ‘donor intermediaries’) such as JustGiving. At present, a Gift Aid declaration (GAD) is needed for each individual charity, even where the donor gives through the same intermediary. SMS text donations are also troublesome as donors rarely reply to the GAD request sent to them after they make their donation.

The Donations to Charity (Gift Aid Declarations) Regulations 2016, due into force on 6th April 2017, allow a donor to authorise a donor intermediary to give a GAD to charities on their behalf. In practice, this means that the intermediary can use that GAD for every donation the donor makes using their platform within that tax year.

The intermediary has the following responsibilities to donors who use the new process:

  1. provide the donor with an explanation of the tax consequences of the donation, both before it is given and in every subsequent tax year
  2. record the date of each explanation.
  3. record the donor’s authorisation to give a GAD.
  4. record any cancellations of the donor’s authorisation.
  5. issue and record annual statements to donors

A donor may cancel the GAD at any time by post, phone call or online and will not be liable for any costs so long as they have paid more tax than the total claimed under the scheme.

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