HMRC has published new guidance on the scheme for charities that have had events cancelled due to coronavirus.
The Gift Aid scheme allows charities or Community Amateur Sports Clubs (CASC) to take a taxpayer’s donation and, provided all the qualifying conditions are met, to reclaim the basic rate tax. This allows for an extra 25p of tax relief on every pound donated to charity.
HMRC will accept that where a person due a refund decides to donate this to the charity, the charity can still claim gift aid subject to the following:
- the individual does not receive a benefit as a result of their donation, agrees that the cost of their ticket becomes a donation and completes a Gift Aid declaration.
- the charity must also keep an audit trail, including a copy of the agreement from an individual agreeing to the donation of the cost of the ticket.
The charity no longer has to physically refund the ticket price for the individual to re-donate. If a charity event has been postponed and not cancelled, any tickets for that event are not eligible for the temporary changes.