Tax: HMRC Rules on Benefits to Donors
HMRC are exploring a revision of the rules on benefits given to donors. Currently donors can receive benefits from a charity in accordance with the HMRC benefit limits as follows:
|Amount of donation||Maximum value of benefits|
|£0 to £100||25% of the donation|
|£101 to £1,000||£25|
|£1,001 + (made on or after 6 April 2011)||5% of the donation (up to a maximum of £2,500)|
In addition, currently benefits are assessed at fair market value rather than the cost to the charity.
An official at HMRC has announced that they are considering revising the rules to allow:
- Benefits of any value to individual donors as long as the total benefits are below a certain threshold (possibly 1% - 5% of all gift aid claimed);
- Benefits to be assessed at cost to the charity; and
- A reduction in a charity's gift aid bill, rather than a removal of the right to claim altogether, if a charity exceeds its limit.
Key action points:
- HMRC have advised that they are at the early stages of considering these revisions, however charities who think this may impact them should keep a close eye on any future publications from HMRC.