Wednesday, 3 April 2013

Gift Aid Explained

Have you, like me, become a bit confused about the whole Gift Aid process, especially when applied to visitor attractions?

Gift Aid as a basic concept is quite straight-forward when it applies to charitable donations. The explanation given on the HM Revenue and Customs website is that “Gift Aid increases the value of donations to charities by allowing them to reclaim basic rate tax from your gift.”
Simple, you make your donation, declare yourself as a UK taxpayer and your donation is worth more as the tax is claimed back.

However, the concept becomes somewhat more vague when applied to visitor attractions, which often have charitable status. I have visited attractions where I have paid the standard entrance fee and just signed a form to agree to Gift Aid. Yet I have visited others where if I want to agree to Gift Aid I have to pay a higher admission charge for this to take place. This got me wondering why that is.

Apparently, in 2006 the law surrounding Gift Aid on admission charges changed, stating that as Gift Aid was aimed at donations, it was not appropriate for it be to claimed on standard admission charges payable by all. Instead, in order to qualify for Gift Aid, visitors had to make a donation on top of the standard fee of at least another 10%. Providing the donation element of the charge has been paid, the whole amount of the admission fee can then qualify for the tax benefit. For example, if the admission charge is £10, providing you pay at least £11, Gift Aid will be given on the whole £11.

However, there are some conditions attached to the Gift Aid pricing strategy. The difference between standard admission charges and the Gift Aid inclusive price must be clearly stated/displayed, with the visitors choosing for themselves whether they want to pay the higher amount, rather than be coerced.

On a visit to a National Trust property (Bodiam Castle), we were automatically charged the Gift Aid price, without being asked, let alone volunteering it. This was wrong and we stated as such, insisting that they reissue standard tickets, amidst much groaning on their part.  Sorry guys, but the law says that we must volunteer the donation amount – otherwise it’s hardly a donation!

I can’t help thinking charitable status is issued a bit too freely anyway; with organisations/attractions qualifying for Gift Aid when I don’t think it’s appropriate. If too much tax is claimed back, that leaves the public purse a bit short for other essentials, like education and healthcare. We should really only agree to Gift Aid in situations where we think it is wholly appropriate and most needed.

What are your thoughts on Gift Aid?

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