CHARITIES
Gift Aid Benefit Limits
The upper limit on benefits that donors making large donations to charities and community amateur sports clubs can receive, where donations of more than £10,000 are eligible for Gift Aid tax relief, will be increased from 6 April 2011 (or accounting periods ending on or after 1 April 2011 for corporate donors).
The overall limit is increased from £500 to £2,500 (still subject to a maximum 5% of the gift).
Self-assessment Donate Withdrawal
The Self-assessment Donate Scheme, under which taxpayers were able to direct that a tax repayment due from HMRC should instead be made direct to a charity of their choice, is to be withdrawn for tax returns for the year 2011/12 onwards and earlier years where repayments are made on or after 6 April 2012.
Substantial Donors to Charity
Following representation by the charity sector, the anti-avoidance legislation surrounding donations is to be revised to ensure better targeting and to reduce the administrative burden. The revised legislation will deny tax relief on donations only where the donor is party to arrangements the main purpose, or one of the main purposes, of which is to obtain a financial advantage for the donor or a connected person from the charity, either directly or indirectly. There will be a carve out for relevant housing providers and charitable payments made to a charity for onward transmission to a non-charitable body.
The revised legislation will have effect in relation to donations made on or after 1 April 2011.
Gift Aid
From April 2013 charities and community amateur sports clubs that receive small donations of £10 or less will be able to apply for a Gift Aid repayment on total donations of up to £5,000 without the need to obtain Gift Aid declarations, provided that they have been operating the Gift Aid scheme for at least three years and have a good compliance record.
In 2012/13 HMRC intend to introduce a new online system for charities to register their details for Gift Aid and to make Gift Aid claims.