Tuesday, 22 April 2014

The number of HMRC investigations into Gift Aid claims doubled last year

By Edward Lander, Third Sector Online, 22 April 2014

HM Revenue & Customs

HM Revenue & Customs

Figures show that 1,057 checks and audits of charity claims for the tax relief were carried out in 2012/13, up from 510 the previous year

HM Revenue & Customs more than doubled the number of investigations it made into charity claims for Gift Aid last year, new figures show.

According to figures obtained by the accountancy firm Wilkins Kennedy under the Freedom of Information Act, HMRC carried out 1,057 checks and audits of charity claims for Gift Aid tax relief in 2012/13, compared with 510 the year before.

HMRC raised more than £6m in additional tax last year as a result of the increased scrutiny, Wilkins Kennedy said, compared with £10.4m of additional tax in the previous year.

A spokesman for HMRC said that it had doubled the resources it had devoted to charity compliance over the past four years. But he said that most charities played by the rules. "The government has given HMRC additional funding of more than a billion pounds to ensure a level playing field for all taxpayers," he said.

John Howard, a partner at Wilkins Kennedy said: "HMRC is on the look-out for charities it believes have been set up for tax, rather than charitable, purposes and root out cases where the donors’ main aim is avoidance.

"Although cases of deliberate abuse or fraud are rare, when it uncovers anything suspicious, it’s going to use all the tools at its disposal to take action."

It is understood that the Cup Trust tax-avoidance scheme was not the reason for the increased scrutiny. In two years the trust raised £176m in donations, claimed £46m in Gift Aid tax relief but spent only £55,000 on charitable activities.

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  1. An interesting and enlightening article - Thank you very much for the post.

    "cases of deliberate abuse fraud are rare"
    So as this is generally the case, it reinforces the fact the PBCC do pay their fair share of tax. No wonder the mud being thrown doesn't stick.

  2. Rare does not mean 'non-existent'.

    1. Why do PBCC Ltd affiliated companies keep changing their structures and swapping directors around?