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Government confirms Gift Aid available on donated ticket costs

2nd April 2020

Responding to a written question to Parliament, Lord Agnew, the Minister of State for HM Treasury confirmed that Theatres and other cultural venues that are charities will be eligible to claim Gift Aid on donated ticket costs.

During the current COVID-19 outbreak, theatres and other visitor attractions such as museums and galleries are closed and will have had to cancel performances and events.

Many theatres were concerned that their cashflow would be affected by having to refund tickets for cancelled shows or events.  The clarification is welcome so that where a customer is happy to donate their ticket costs rather than have a refund, that act makes the receipt a donation for the theatre.  

This is actually a relaxation of the Gift Aid rules because normally debts need to be repaid and then the funds given back rather than simply “released”.

As usual with Gift Aid, a suitable declaration is required that the donor has paid sufficient tax to cover the tax that the charity will reclaim.

It is helpful to note that Gift Aid declarations can be made orally (including over the ‘phone) or by electronic means (e.g. email) as long as they cover the key requirements of the declaration: -

  • Name and home address of the donor
  • Name of the charity
  • Identifying the gift or gifts to which the declaration relates 
  • Confirmation that the donation is qualifying i.e. that the donor has paid sufficient Income Tax or Capital Gains Tax in the current tax year

This is a very welcome confirmation from the Government, but charities should remember they still need to process the Gift Aid declarations to be able to claim the cash back from HMRC.

Gift Aid is usually denied where individuals are receiving a service from a charity (such as a ticket to a fundraising event) and similarly Community Amateur Sports Clubs cannot claim Gift Aid on members subscriptions.  At present the relaxation seems only to relate to theatres and cultural venues but the principle could equally apply to cancelled fundraising events for other types of charities and sports clubs who are closed, so it will be interesting to see if further announcements follow on a wider basis.
 

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