The government has pledged to introduce new measures to protect charities claiming Gift Aid before it implements new consumer protections around membership subscriptions.
Jeremy Hunt, the Chancellor of the Exchequer, delivered his Budget before MPs in the House of Commons today.
Documents published alongside the speech say that the Digital Markets, Competition and Consumers Bill, which is going through parliament, is introducing new protections for consumers who take out subscription contracts.
“The government will amend existing Gift Aid legislation by statutory instrument so that charities can continue to claim Gift Aid while complying with these new protections,” the documents say.
“The government’s intention is that these amendments to the Gift Aid regime will be in place by the time the relevant provisions of the bill come into force.”
The new bill will introduce legislation to offer people who take out subscription contracts a 14-day window to cancel and receive a refund.
But there is a requirement under Gift Aid for any payments to be “gifts”, meaning the tax relief cannot be claimed on any amount that is subject to a condition of repayment.
Sarah Vibert, chief executive of the National Council for Voluntary Organisations, said there were still concerns around the “lack of clarity” in the bill around when its measures would apply to charitable membership subscriptions.
“We welcome that the government has listened to charities and committed to ensure Gift Aid can continue to be claimed on membership subscriptions,” she said.
“We will work with the government to ensure the solution is workable and doesn’t create additional administrative burdens for charities.”
She said the NCVO would continue to press the government to provide “consistency between consumer and tax rules on when subscriptions can be treated as donations”.
The NCVO said it would work to ensure the government had a solution for the problem that “does not make it generally harder for charities to claim Gift Aid”.
Vibert said: “There remain significant concerns around the challenges of implementing a cooling-off period, potentially enabling people to temporarily take advantage of access to charity property, and the government should consider the appropriateness of these measures.”
The Charity Tax Group said it was glad the government had responded to “avoid a problem emerging”.
The Charity Finance Group also welcomed the government’s changes but still had some concerns.
Richard Sagar, head of policy at the CFG, said: “We welcome the government’s firm commitment to ensure charities can continue to claim Gift Aid on membership subscriptions.
“CFG, along with others including the Chartered Institute of Fundraising and NCVO, is working with the relevant departments, and our members and infrastructure partners to ensure that the proposed solution is practical and does not provide additional work for charities.”
He said concerns remained about the bill but the CFG would “engage with government to address concerns about a ‘cooling-off period’ and work to ensure that the government also creates guidance and provides support for affected charities”.