New guidelines on charity shop gift aid

Her Majesty’s Revenue and Customs (HMRC) has published new guidelines outlining the new gift aid claiming process for charity shops, which aims to simplify claims.

The rules were announced in December and became active at the beginning of April. One feature is that those who donate items to charity shops can make one-off gift aid declarations, negating the need for the charity to write to donors once the items have been sold before being able to claim the relief.

An organisation which runs its shops via a trading subsidiary can accept one declaration for the sale of items costing up to £1,000 per annum. Shops not run this way can instead receive the same for goods to the value of £100 from an individual donor.

The new guidance includes how gift aid operates across a broad range of scenarios, details of when donors need to sign an agency agreement, the effect when a charity engages commercial operators to sell certain goods on behalf of an individual donating the proceeds to the charity, tax implications for donors and record-keeping for gift aid.

HMRC has also included template letters that shops can use to write to people regarding gift aid on their donated items.

The guidelines entitled 3.51 Claiming Gift Aid when goods are sold by, and the proceeds gifted to, charities can be viewed at www.hmrc.gov.uk/charities/guidance-notes/chapter3/sectionf.htm.

To help with the transition, the Charity Retail Association is providing an information pack for its members, which answers frequently asked questions and provides some example agency agreements. For further information visit www.charityretail.org.uk.