How do the changes to Gift Aid affect your charity? » Charity Digital News

How do the changes to Gift Aid affect your charity?


Charity shops must make the procedure of selling items clear to potential donors, according to a newly-published HM Revenue & Customs guidance document.

Changes to the Gift Aid regime are laid out in the guidance, along with a template letter, outlining the various methods of claiming Gift Aid.

Charity shops will often ask people who donate items to make a Gift Aid declaration. Charities cannot claim Gift Aid on donations of physical items, such as clothes or books, only on donations of money. ​

However, charities can claim Gift Aid on donations of the income from the sale of supporters’ goods. In order for that to happen, the donor must retain legal and beneficial ownership of the goods until they are sold.

When the items have been sold, the donor can then donate the proceeds. The usual Gift Aid conditions apply, in particular that the donor must have sufficient tax liability to cover the tax reclaimed under Gift Aid.

In a blog on its website, the The Institute of Chartered Accountants in England and Wales wrote: ​“It does sound as though HMRC may be planning to take a closer look at charity shops that operate Gift Aid schemes for donated goods and at donors who make Gift Aid declarations but do not pay sufficient tax to cover the donations.”

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  • Beacon

    Charities can sign up for a free Beacon online shop (Winner of the TalkTalk Digital heroes fundraising awards) – using this supporters sell their items on the Beacon marketplace and THEN automatically donate the proceeds to their charity. This fully complies with the new gift aid rules. charities can sign up at this link