THE NUMBER of investigations undertaken by HM Revenue & Customs into Gift Aid claims more than doubled over the past year, raising an additional £6m.
Figures obtained by Top 50 firm Wilkins Kennedy show HMRC carried out 1,057 checks and audits of charity claims for Gift Aid tax relief in 2012/13, up from 510 the year before.
Although a portion is derived from miscalculations and mistakes, the firm points out that controversy over the charity tax avoidance scandals such as the Cup Trust last year has fuelled a drive by HMRC to uncover more cases of wrongdoing and claw back deliberately underpaid tax.
The Cup Trust, a registered charity, raised around £176m over two years from 2010 – more than the Royal Society for the Protection of Birds, the British Heart Foundation and the Salvation Army – yet only £55,000 was put towards its stated cause of “improving the lives of young children and adults”. In all, around £46m of tax was avoided through Gift Aid claims.
Wilkins Kennedy partner John Howard said: “The Gift Aid system can be quite complicated to administer, particularly for smaller charities whose systems may not be quite up to the mark to make sure all the ‘Is’ are dotted and all the ‘Ts’ are crossed.
“Many charities are aware of the difficulties and are getting better at managing Gift Aid, for example by putting tracking systems in place to claim back tax on sales of donated goods.
“However, ensuring all the paperwork is correct and in place remains problematic for many.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
Freelancers and micro-businesses still need more information about the government’s plans to make tax digital
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile