From 6 April 2017, donors can give intermediaries the authority to create gift aid declarations on their donations for the rest of the tax year. HMRC says if intermediaries get authority on or after the 1 March, they can make gift aid declarations for the remaining tax year and all of the next tax year, which starts on 6 April.

The new process will mean that a donor will only have to complete a declaration once a year for each intermediary they give through.

HMRC says this process will not affect any current or future enduring gift aid declarations, and is voluntary, so intermediaries still have the alternative option of creating gift aid declaration for each donation.

The guidance says intermediaries can get authorisation to make gift aid declarations at any time during the tax year. They will need to tell the donor that if they pay less income tax and capital gains tax than the amount of gift aid on their donations in a year, they will have to pay the difference.

Once intermediaries have authorisation from the donor, they can make gift aid declarations for the rest of the tax year or until they cancel it.

Donors must be able to remove their authorisation at any time by contacting the intermediary concerned. They must be able to set a date to cancel their authorisation. If they do not specify a date, their authorisation should end immediately.

There is a new requirement for intermediaries to produce an annual statement for the donor between the 5 April and 31 May for the previous tax year. This must be sent directly to the donor, or the donor must be informed that it has been produced and provided with instructions on how to access it.

There is no need to send a statement to donors who only make one gift aid donation in a tax year, or who donated less than £20 in total in a tax year.

The annual statement must include the total amount of the donations that were gift aided; the maximum amount of gift aid that can be claimed on their gift aided donations; and an explanation that donations directly to charities or to other intermediaries are not included in the statement. It must also include the explanation that if the donor pays less income tax and capital gains tax than the amount of gift aid claimed in a year, they will have to pay the difference.

Intermediaries are required to keep certain records about the donor’s authorisation. These include the date authorisation was given and the donor’s name and address; the date of any cancellations and the donor’s name and address; the explanation that the donor must pay more tax than the gift aid on their donations and the date this was given; and the annual statement, or details of how this was made available to the donor.

Records of these events must be retained for six tax years from the end of the year when they were given or sent. Failure to provide the record on request to HMRC will result in a £300 fine plus an additional daily penalty. 

Additional penalties are a £50 fine for each failure to keep a record or issue a statement, up to a total of £3,000 in a tax year. This cap does not apply to the daily penalty for not providing records to HMRC.

HMRC guidance: Create Gift Aid declarations for your donors as an intermediary is here.