Gift Aid: charities warned to check gift aid eligibility of low income donors following tax changes

From 6 April 2014, the income tax personal allowance for individuals born after 5 April 1948 rose from £9,440 to £10,000, removing 250,000 people on low incomes from income tax. However, this means that they will also cease to be eligible to claim Gift Aid on qualifying donations. The Chartered Institute of Taxation (CIOT) has warned that failure to cancel enduring Gift Aid declarations could result in HMRC recovering incorrectly claimed Gift Aid from the donor and, in some cases, from the charity that received the donation.

CIOT has also warned that, from 6 April 2015, the situation will be further compounded when the first £5,000 of savings income will become tax free, taking even more people (particularly pensioners) out of income tax.

Charities are strongly advised to “regularly” and “clearly” inform donors who have an enduring gift aid declaration of the income tax requirements that need to be fulfilled in order for them to be eligible to make such a gift aid declaration.

For further information on charity donations,fundraising and gift aid eligibility matters please contact our charity law experts on 01895 207809 or email charities@ibblaw.co.uk.