Gift Aid gift for charities

Welsh charities are celebrating an early Christmas gift in the form of new rules allowing them to make more money from donations.
HM Revenue and Customs (HMRC) is lifting the administrative burden for organisations claiming Gift Aid on the proceeds of donors’ goods sold by charity shops.
Gift Aid is a tax relief on donations of money by individuals, with the donor having to pay at least the same amount of income tax or capital gains tax as the charity reclaims from HMRC on the donation.
In 2006, the third sector devised a way for Gift Aid to be applied to the proceeds of goods sold by charities on behalf of their supporters. Instead of giving the goods to the shops for the shop to sell, the shop sells the goods on behalf of the supporter, offering them the choice of taking the money - less a sales commission - or giving it to the charity under Gift Aid.
Currently, charities are required to write to a donor before they can claim Gift Aid on the proceeds from each sale, so that the donor can confirm that they are UK taxpayers
The new rules allow donors to make a one-off Gift Aid declaration that covers donations of up to £100 - or £1,000 of future sale proceeds - in a tax year without the shop needing to seek the supporter’s permission to claim the tax relief. The charity will need to write to the donor only when sale proceeds exceed the amount.
Wales Council for Voluntary Action (WCVA), the umbrella organisation for Wales’s 30,000 voluntary groups, has welcomed the announcement.
‘This is excellent news for charities who claim Gift Aid on goods donated to their charity shops,’ said WCVA Giving Officer Eileen Kinsman.
‘It will mean a considerable reduction in administration and bureaucracy and the associated costs. As many charities in Wales raise significant income from their charity shops, it will mean more money going directly to the beneficiaries.’
The new procedures apply from April 2013. HMRC will publish detailed guidance on them in the New Year.

(Source:WCVA)