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Last updated: 23 November 2008
Following on from the announcement about Gift Aid Transitional Relief in the Budget 2008, Royal Assent to both the Finance Bill and the Appropriation Bill has now been granted. This means that if a charity has already made a Gift Aid repayment claim on donations received on or after 6 April 2008, the Treasury can now pay the transitional relief in respect of those donations.
From now on, when HMRC make a tax repayment on Gift Aid donations made on or after 6 April 2008, they will automatically pay Gift Aid Transitional Relief (where it is due) in addition to the tax claimed.
The annoucnement in this year's budget meant that for donations made by donors on or after 6 April 2008, charities will claim Gift Aid repayments at a new basic tax rate of 20 per cent but they would also be entitled to a transitional relief worth 3p for every £1 donation they receive under the Gift Aid scheme. This transitional relief has been provided by Government to allow charities to adjust to the fall in basic rate tax from 22 per cent to 20 per cent, and will be paid in respect of all qualifying Gift Aid donations made to charities between 6 April 2008 and 5 April 2011. This means that for every pound donated under the Gift Aid scheme the charity will continue to receive 28p.
Further information on Gift Aid transitional relief can be found on the HMRC website.