Gift Aid administration
22.Paragraphs 4 to 7 amend the rules for charitable trusts and charitable companies to make claims for the repayment of tax. Currently:
charitable trusts that have been issued with a notice to file a tax return can claim a repayment of income tax under Gift Aid only on the tax return (section 42(2) of the Taxes Management Act 1970 (TMA)); and
charitable companies, and CASCs that are subject to corporation tax, can claim a repayment of income tax under Gift Aid only after delivery of a company tax return for the period to which the claim relates (paragraphs 9(1) and (2) of Schedule 18 to the Finance Act (FA) 1998).
23.Paragraph 4 removes the restrictive condition on claims to Gift Aid outside a return in respect of charitable trusts.
24.Paragraph 4(2) substitutes “(3ZA)” for “(3A)” in section 42(2) of TMA.
25.Paragraph 4(3) provides for the insertion into section 42 of TMA of new subsection (3ZA). This new subsection disapplies the requirement in subsection 42(2) for charitable trustees to make claims for repayment of tax in respect of Gift Aid donations in a tax return if they have been given notice to file a tax return.
26.Paragraph 5(1) provides for ITA to be amended.
27.Paragraph 5(2) substitutes “sections 538 and 538A” for “section 538” in section 518(4) (overview of Part 10) of ITA.
28.Paragraph 5(3) provides for the insertion into ITA of new section 538A (Claims in relation to Gift Aid relief).
29.New section 538A(1) of ITA provides that the new section applies to charitable trusts that claim exemption from tax on donations received under Gift Aid.
30.Subsection (2)(a) and (b) of new section 538A of ITA provides that a claim may be made to an officer of HMRC or by inclusion on a trustee’s self assessment return.
31.Subsection (3) of new section 538A of ITA defines a “free-standing claim” as a claim made to an officer of HMRC under subsection 2(a) of the new section 538A of ITA, and defines “tax return claim” as a claim included in a tax return under subsection (2)(b) of the new section 538A of ITA.
32.Subsection (4) of new section 538A of ITA provides a regulation making power for HMRC to make provision in relation to claims that are allowed under new section 538A of ITA.
33.Subsection (4)(a) of new section 538A of ITA provides that the number of “free-standing claims” made by a charitable trust may be limited by regulations.
34.Subsection (4)(b) of new section 538A of ITA enables an amount to be specified in regulations below which a claim has to be made as a tax return claim.
35.Subsection (5) of new section 538A of ITA provides that the regulations made under subsection (4) can make different provisions for different cases or purposes.
36.Paragraph 6 removes the restrictive condition on claims to Gift Aid outside a return, as explained in paragraph 22 above, in respect of charitable companies.
37.Sub-paragraph (2) inserts new sub-paragraph (2A) in paragraph 9 of Schedule 18 to FA 1998 (claims that cannot be made without a return) which disapplies the provisions contained in paragraph 9(1) and (2) of Schedule 18 to FA 1998, where a charitable company or eligible body makes a claim in respect of gifts that qualify for Gift Aid relief (under section 472 or 475 of CTA).
38.Sub-paragraph (3) inserts new sub-paragraph (1A) in paragraph 57 of Schedule 18 to FA 1998 (claims or elections affecting a single accounting period) which disapplies paragraph 57 for charitable companies enabling claims for relief in respect of Gift Aid (under section 472 or 475 of CTA) to be made outside a return.
39.Paragraph 7 provides for the insertion into CTA of new section 477A (Claims in relation to gift aid relief).
40.New section 477A(1) of CTA provides that the new section applies to charitable companies and eligible bodies that claim exemption from tax on donations received under Gift Aid.
41.Subsection (2)(a) and (b) of new section 477A of CTA provides that a claim may be made to an officer of HMRC or by inclusion on a company self assessment tax return.
42.Subsection (3) of new section 477A of CTA defines as a “free-standing claim” a claim made to an officer of HMRC under subsection 2(a) of the new section 477A of CTA, and defines “tax return claim” as a claim included in a tax return under subsection 2(b) of the new section 477A of CTA.
43.Subsection (4) of new section 477A of CTA provides a regulation making power for HMRC to make provision in relation to claims that are allowed under new section 477A of CTA.
44.Subsection (4)(a) of new section 477A of CTA provides that the number of “free-standing claims” made by a charitable company or CASC may be limited by regulations.
45.Subsection (4)(b) of new section 477A of CTA enables an amount to be specified in regulations below which a claim has to be made as a tax return claim.
46.Subsection (5) of new section 477A of CTA provides that the regulations made under subsection (4) can make different provisions for different cases or purposes.