After a review of the Gift Aid donor benefit rules, the government announced plans in the Budget to simplify the rules for charities using donor tax relief and realign existing thresholds to a simpler two-tier system
The government will legislate in Finance Bill 2018-19 to simplify the donor benefit rules that apply to charities that claim Gift Aid tax relief on donations.
Currently there are a mix of monetary and percentage thresholds that charities have to consider when determining the value of benefit they can give to their donors in consequence of a donation on which Gift Aid can be claimed.
These will be replaced by two percentage thresholds:
• the benefit threshold for the first £100 of the donation will remain at 25% of the amount of the donation;
• for larger donations, charities will be able to offer an additional benefit to donors up to 5% of the amount of the donation that exceeds £100.
The total value of the benefit that a donor will be able to receive remains at £2,500.
Four extra statutory concessions that currently operate in relation to the donor benefit rules will also be brought into legislation.
The changes will have effect on and after 6 April 2019.