April 9th, 2020 / Insight posted in Articles, Coronavirus, People, Tax

Gift Aid on ticket refunds waived for cancelled events

Ticket refunds for cancelled shows that are converted into donations with agreement from the customers are now eligible for Gift Aid for charitable organisations. The proviso is that customers complete a Gift Aid declaration, so there is no need for the charities to refund the money and ask for it back again.

In the current crisis, many organisations are having to cancel events, such as theatrical performances, exhibitions and similar functions, which is causing them severe cash flow difficulties. Charitable organisations have been asking their customers to forego their ticket refund and instead treat their payment as a donation.

Previously, it was not possible to claim Gift Aid relief on the value of these monies because it was a conversion of a debt rather than a voluntary payment. We wrote to the Charity Tax Group (CTG) to ask them to make representations to the Chancellor to relax this restriction.

On 19 March, the CTG published a letter requesting a range of relaxations and clarifications to the Gift Aid system to help charities during the pandemic. The announcement from the Charity Tax Group containing the response to a parliamentary question posed by Lord Chris Smith (former Culture Secretary) is here.

In principle, this is extremely positive news, although the CTG is awaiting more details as to how this might apply in practice. Particularly pressing is the extent to which this might also cover other charity events (for example, fundraising dinners and sponsored events such as marathons) that have had to be cancelled.