In the latest technical consultation released this week in a ream of HMRC documents is draft secondary legislation to give intermediaries a greater role in administering Gift Aid.

The new Gift Aid rules are set to come into force in April 2017.

Once the government has reviewed responses to the consultation, draft Regulations will be made later this year with the intention of coming into effect in April 2017 under The Donations to Charity (Gift Aid Declarations) Regulations 2016.  

Part of the measures are designed to make it easier for donors to make donations via text message and SMS, for example, but still benefit from Gift Aid contributions.

Under current rules, Gift Aid claims need to be supported by the donor’s name, address and confirmation that the donor is a taxpayer so the charity or intermediary has to reply to the donor to collect this information.

Under the new proposals, the government is proposing a system of one declaration per intermediary, who will then be able to create a declaration for all donations that a donor makes for the rest of the tax year.

The measure should ease the ongoing administrative burden on a small number of intermediaries by relieving them of the need to receive a Gift Aid declaration for each individual charity.

There are up to 139,000 charities that are registered for Gift Aid although less than 70,000 actually claim Gift Aid.

There will be some one-off costs for intermediaries to put systems in place to implement the change but the government has not released details of the estimated costs until the new rules are finalised.

When the new rules come into force, subject to final approval, if a donor uses a fundraising website to sponsor various different parties and raising money for multiple charities, they would be able to complete one Gift Aid declaration on the website – effectively giving the intermediary the right to register the donor for Gift Aid across the board for a one-year period. Currently the same donor would have to complete four separate Gift Aid forms.

If the donor has given their authorisation to the donor intermediary after 1 March, for example, the authorisation will roll over and will last until the end of the next tax year. It is the donor’s responsibility to alert the intermediary about any change of tax circumstances.

HMRC has also set a series of donor intermediary requirements, which must be complied with, including keeping records of:

• the donor’s authorisation allowing them to complete declarations on the donor’s behalf;
• record of the date on which section 424 (current rules under ITA 2007) was explained to the donor;
• record of any cancellations of the donor’s authorisation;
• issue an annual statement to donors who use the new process; and
• a record of an annual statement sent to donors who use the new process.

The new annual statement will be a mandatory requirement for donor intermediaries. This annual statement will be sent to donors who have donated to more than one charity and the total amount donated exceeds £5.

There will also be a penalty system if the donor intermediary fails to comply with any of these requirements.

HMRC will produce guidance to cover intermediaries and their role in administering Gift Aid, due to be published around the same time as the Regulations come into effect next April.

The closing date for responses is 5 October 2016.

The HMRC Gift Aid and Intermediaries technical consultation is here