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14th May 2020

Charities can claim Gift Aid on tickets sold for cancelled events

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HMRC have updated their guidance for processing ticket refunds, collecting donations and claiming Gift Aid on cancelled charity events as a result of COVID-19.  This guidance will be welcomed by charities, who in light of the “lockdown”, had to make the financially difficult decision to cancel events.

The guidance states that charities can claim Gift Aid on tickets sold to cancelled events if supporters decide against asking for refunds. Where a person is due a refund and decides to donate this to the charity, they will accept Gift Aid can be applied to top up this donation.

This will be possible, provided the individual does not receive a benefit as a result of their donation; agrees that the cost of their ticket becomes a donation; and completes a Gift Aid declaration. The charity must also have an audit trail showing the individual agreed to treat the refund as a donation. The charity no longer has to physically refund the ticket price for the person to re-donate.

To benefit, charities are required to:

  • contact the individual who previously purchased the tickets of the cancelled event;
  • explain that the individual is entitled to a refund but may wish to donate the cost of the ticket to the charity;
  • make it clear that the individual does not have to donate the refund but if they choose to donate it, it is non-refundable;
  • make sure the individual has enough tax to cover the donation;
  • document the conversation with the individual and keep records of this; and
  • ensure that there is a Gift Aid declaration in place for the individual.

If the charity event has been postponed and not cancelled, any tickets for that event are not eligible for the temporary changes.

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