HMRC have recently clarified two sections of its guidance with regards to Gift Aid and specifically the waiving of a refund or a loan repayment due to an individual from a charity.
HMRC consider a donation to be a payment of a sum of money. This had historically led to misinterpretation in instances where individuals waived a refund or loan repayment due from a charity, which increased in frequency during and immediately after the Covid-19 pandemic. Clarification has since been made: a ‘clear agreement’ to cancel a loan or not accept a refund can now be treated as a donation of a sum of money.
This has a positive knock-on impact for charities which claim Gift id, as Gift Aid can only be claimed on ‘qualifying charitable donations’, which providing there is a clear agreement, now includes the waiving of a refund or loan repayment by an individual.
