28 March 2012
HMRC has published guidance specifically aimed at schools that are owned or run by charities or are associated with charities in any way.
The guidance aims to clarify where gift aid can apply for payments made to a charity, or payments can be made under the payroll giving scheme.
The essence of a gift aid payment is that it must be made voluntarily. Therefore, any payment made in return for services or goods cannot qualify under the scheme. It is a well-known fact that fees paid to independent schools, which are often charitable in their nature, cannot be made under gift aid. HMRC also seems to be indicating that it will look at payments particularly, those described as ‘voluntary’ or a ‘donation’, if access to some facilities or services depends on it being made. In these circumstances then a claim for gift aid will be denied.
HMRC has provided some useful examples of situations where it considers donations can be made under the gift aid or payroll giving schemes. These include building appeals, non-uniform days, educational school trips and appeals to fund scholarships. In addition, the guidance includes details about the charity audits HMRC undertakes and how these are conducted.
For further information, please feel free to contact Ann Mathias.