Partnerships and Gift Aid - HMRC changes effective from 6 April 2016
Frequently Asked Questions - May 2016
1. When are the new changes effective from?
The new HMRC rules on partnership Gift Aid declarations will be effective from 6 April 2016.
2. What do the new rules mean for us as a partnership?
From 6 April 2016, when a business partnership makes a donation to a charity or CASC (community amateur sports club), a separate Gift Aid declaration from each equity partner is required. Future new partners will need to sign a Gift Aid declaration when they join the partnership if further donations are made by the partnership to the CAF Company Account.
The amount of each partner’s share of the whole donation will also need to be specified in their individual Gift Aid declaration or in any supporting correspondence given to a charity or CASC.
3. Why has the process for partnership donations been changed by HMRC?
HMRC have provided the following rationale for change:
These changes respond to the recommendations from the National Audit Office review of how HMRC monitors tax reliefs on charitable donations and addresses tax avoidance, fraud and error relating to these reliefs. HMRC has also received legal advice that guidance which permitted a nominated partner to make a Gift Aid declaration on behalf of all the partners in the firm does not accord with the law.
4. What changes will CAF be making as a result of the new rules?
For CAF to continue to be able to claim Gift Aid on the donations made by your partnership into your CAF Company Account, we will require completed individual Gift Aid declarations for each equity partner who wishes to donate.
Subsequently, an individual funding account will be created for each partner. This will enable us to track and claim Gift Aid for each partner’s individual share of the whole donation made from your partnership in line with HMRC requirements.
All of these individual partner funding accounts will be linked to your partnership’s CAF Company Account. Any Gift Aid claimed at individual partner level will be transferred to this main account from which you as a partnership can continue to make giving requests and donations to your nominated charities.
5. Can each partner have access to manage their individual Partner Funding Account?
No. These accounts are being created purely to provide a way for CAF to manage individual Gift Aid claims and therefore individual partners will not require or need to be provided with access.
6. Will there be any additional costs?
We will establish new administrative, technical and process changes to ensure claims for Gift Aid on your partnership’s donations can continue to be carried out in accordance with HMRC’s new rules. To take account of the complexity and resource required to run the new process, we need to introduce one-off set up fees for your partnership as follows:
|Set up fee per partner:
||£10 (Exc. VAT)
|Set up fee per partnership:
||£1000 (Exc. VAT)
- The set up fee per partner will vary dependant on the number of individual partners completing Gift Aid declarations within the partnership. For example, if 350 individual partners are confirmed to complete Gift Aid declarations, the set up fee for partners will be £3,500 plus VAT.
- The set up fee for the partnership is a standard fee of £1,000 which will not vary.
- CAF will invoice for such fees and charges following confirmation of individual partner numbers completing Gift Aid declarations.
- Such fees and charges are in addition to any other standard fees and charges applicable to your CAF Company Account.
- All terms of the existing agreements in respect of your CAF Company Account (including the current CAF Company Account Fee Schedule) remain in full force and effect.
7. What does the £10 set up fee per partner cover?
- The administration and processing of individual Gift Aid declaration forms.
- Processing of individual partner Gift Aid claims.
8. What does the £1000 set up fee per partnership cover?
- Creation of multiple individual partner funding accounts.
- Additional account administration during the transition period.
- Client reporting including status of Gift Aid declarations.
9. Can individual partners complete their Gift Aid declaration with our partnership’s business address?
No. In line with HMRC requirements, each partner must provide their residential home address including postcode on their Gift Aid declaration.
10. Why do you need a partner breakdown to accompany the donation?
CAF need to be able to identify how much Gift Aid needs to be claimed from HMRC for each individual partner’s share of the whole donation. This is also a key requirement from HMRC under the new rules.
11. Is it still possible for our partnership to send a donation to CAF without individual Gift Aid declarations and without a breakdown of each partner’s share of the whole donation?
Yes, CAF can still continue to receive donations into your CAF Company Account but we will not be able to claim Gift Aid on these donations. Your partnership will still be able to make payments to its chosen charities through CAF if there is sufficient balance on the account.
12. What happens if our partnership is unable to provide a breakdown of each partner’s share of donations made into our CAF Company Account until the end of our financial year end has been completed? Is this still acceptable?
Yes, if this is the case, this is still acceptable. We will continue to be able to receive donations into your partnership’s CAF Company Account and disburse funds to your partnership’s chosen charities. However, we will only be able to claim Gift Aid on these donations from HMRC once the donation allocation breakdown has been received from you as well as the completed individual Gift Aid declaration forms. As such, this will result in a delay in Gift Aid being claimed on your donation(s) share and transferred to your CAF Company Account.
13. If our partnership wishes to close our CAF Company Account – what happens to the balance on the account?
Please contact your Corporate Client manager or CAF Customer Services at Partnership@cafonline.org for further information regarding next steps.
14. When can our partnership expect to be invoiced for the one-off set up fees?
We will invoice for such fees and charges following receipt of your:
a. List of participating equity partners - the £1000 set up fee per partnership covers the:
• Creation of individual partner funding accounts
• Additional account administration during the transition period
• Client reporting including status of Gift Aid declarations
b. Individual partner Gift Aid declaration forms - the £10 set up fee per partner covers the:
• Administration and processing of individual Gift Aid declaration forms
• Processing of individual partner Gift Aid claims
15. What happens when a partner leaves or starts with our partnership?
If your partner(s) changes, please notify your Corporate Client manager or a member of our Customer Services team at Partnership@cafonline.org so that our records and regular reporting on partnership giving can be updated. Any new partners to your organisation will need to complete Gift Aid declarations and submit these to CAF as soon as possible.
16. Why are you collecting personal information from our partners?
The new HMRC rules state that when a business partnership makes a donation to a charity, it will be necessary for each individual partner to make their own Gift Aid declaration. Each partner’s Gift Aid declaration must contain their name and full home addresses and be given to the charity (CAF being the charity in this instance). We therefore need to collect personal information in order to be compliant with the new rules.
17. How will you use our personal information?
In addition to being compliant with HMRC, your partners’ personal information enables us to claim Gift Aid effectively on their behalf. CAF and the companies in which it has a majority stake, or their subsidiaries (defined here as the Group) will not share your information with any outside organisation except as part of providing a product/service or when legally obliged to do so.
18. How should we send our individual partner information to you?
Your sensitive data can be sent to CAF using our secure file transfer service (SFTP), which can be accessed in either of the following ways:
a. Internet browser such as Microsoft Internet Explorer (IE), Chrome, Firefox or Safari, using the URL https://caf.ftpuk.net.
b. Secure file transfer client such as FileZilla or WinSCP which are both free to download and use, to connect to sftp://caf.ftpuk.net
Please inform us if you wish to use either option. Both options require a login and password which will be sent in due course if requested. Once you receive the login and password, you only need to upload your document file to CAF. You will not need to encrypt it as it will be encrypted during the transfer from your system, and while it is transferred into the CAF system for processing.
19. Will the information we provide to CAF be safe and confidential?
20. Will we receive any communication from anyone other than CAF?
21. How do we update the information you hold for our partners?
We will regularly provide you with an up to date report of all the partners that we have linked to your partnership CAF Company Account. If you would like to include a new partner, please send us his/her name, home address and completed Gift Aid declaration (if applicable) to firstname.lastname@example.org
If you would like to inform us of any changes to a current partner or if a partner has left your organisation, please send the details to email@example.com quoting the partner’s Unique ID and your new partnership CAF Company Account number. You can locate the partner’s unique ID on the regular report that we will send you.
22. When will you close our partnership’s existing CAF Company Account and open up the new account?
This process will take place once we have received your list of participating partners as we’ll then start to set up the individual funding accounts. At this stage, we will issue you with a new account number and a new CAF Charity Voucher Book and will also ensure existing contacts and users are transferred over to the new account, along with any standing orders and regular commitments. Prior to migrating the account, we will contact you to advise you on any outstanding anomalies and how best to finalise any relevant details. We will not close your account until all outstanding transactions are complete.
23. Why do you require a signature on the Gift Aid declaration form?
Requesting the signature of the individual partner on the Gift Aid declaration is best practice, however please note HMRC’s guidance notes in relation to this:
A Gift Aid declaration does not need to be signed; individual partners can make the declaration by sending an email to this effect, by replying ‘yes’ to an email containing voting buttons and so on. This type of confirmation would be sufficient for the firm to be able to produce a standard Gift Aid declaration form/letter for the charitable giving agency or in-house charity.