Raising benefits limit – Under the current rules, a charitable donation of over £10,000 will only qualify for Gift Aid Tax relief so long as the donor does not receive benefits from the charity in excess of certain limits. The existing rule that the benefit must not exceed 5% of the donation will remain the same; however, the overriding annual limit that the benefit must not exceed £500 will be increased to £2,500. The new limit will apply to benefits received as a consequence of gifts made on or after 6 April 2011.

SA Donate – The current system whereby taxpayers can make a charitable donation from their tax repayment on their Tax Return will be withdrawn. The system will be withdrawn in relation to tax repayments on Tax Returns for 2011/2012 onwards and also for prior year Tax Returns where the repayment is made after 6 April 2012. The Government’s explanation for the withdrawal of this system is to simplify the tax system and to encourage charitable giving to be made through more cost effective methods.

Records for small donations – Charities that receive small donations of £10 or less will, from April 2013, be able to apply for a gift aid style repayment without having to obtain Gift Aid declarations from the donors. There will be a repayments cap of £5,000 per year on the amount claimed in this manner and to be eligible the Charity will need to have been operating the Gift Aid scheme for at least three years and have a good tax compliance record. There will be a consultation process for the new scheme during the summer of 2011.

Online filing – A new online system for making Gift Aid claims will be introduced in 2012/13. As a preliminary step towards this four new forms will be issued for charities to use. The forms contain automatic checks to improve accuracy and reduce administrative burden.