Budget response from Sayer Vincent

Gift Aid donor benefit rules

As announced at Autumn Budget 2017, the government will legislate in ‘Finance Bill 2018-19’ to simplify the donor benefit rules that apply to charities that claim Gift Aid tax relief on donations. Currently there are a mix of monetary and percentage thresholds that charities have to consider when determining the value of benefit they can give to their donors in consequence of a donation on which Gift Aid can be claimed.

These will be replaced by two percentage thresholds:

the benefit threshold for the first £100 of the donation will remain at 25% of the amount of the donation
for larger donations, charities will be able to offer an additional benefit to donors up to 5% of the amount of the donation that exceeds £100
The total value of the benefit that a donor will be able to receive remains at £2,500. Four extra statutory concessions that currently operate in relation to the donor benefit rules will also be brought into legislation.

A summary of responses to a consultation on simplifying the Gift Aid donor benefit rules will be published on 1 December 2017.

The changes will have effect on and after 6 April 2019.

Helen Elliott, Sayer Vincent commented:

“We have been awaiting the outcome to the donor benefit consultation for some time now. The good news is there is a long lead time before implementation and this is better for donations of between £500 and £1,000. But the bad news is that the benefits permitted between £100 and £500 drop from £25 to just 5% of the donation – so between £5 and £25.”

VAT registration threshold

In response to the Office of Tax Simplification’s report Value Added Tax: Routes to Simplification, the government will consult on the design of the threshold, and in the meantime will maintain it at the current level of £85,000 for two years from April 2018.

Helen Elliott commented:

“There had been rumors that the threshold would be dropped to half or even a quarter of the current level so that many more small businesses were required to register this is a relief as a it would have had a huge administrative burden on many charities not currently registered for VAT.”

Click here to read the full Autumn 2017 Budget blog by CFG.