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Ticket refunds for cancelled charity events

HMRC have published guidance to help charities process refunds, collect donations and claim Gift Aid for events cancelled due to coronavirus.

The guidance states that, if a charity event is cancelled due to the Coronavirus outbreak, HMRC will accept that where a person due a refund decides to donate this to a charity, the amount can be treated as a qualifying donation for gift aid purposes provided:

1. The individual

  • Does not receive a benefit as a result of their donation
  • Agrees that the cost of their ticket becomes a donation
  • Completes a Gift Aid declaration

 

2. The charity keeps an audit trail, including a copy of the agreement from an individual agreeing to the donation of the cost of the ticket

The charity no longer has to physically refund the ticket price for the individual to re-donate.

The guidance makes it clear that any ticket for a charity event which has been cancelled due to the coronavirus (COVID-19) is eligible for these temporary changes.  However, if the charity event has been postponed and not cancelled, any tickets for that event are not eligible for the temporary changes.

 

Process to follow

The guidance then sets out the steps the charity must follow in order to obtain the benefit of the temporary changes.  The charity must:

  • Contact the individual who previously purchased the tickets for 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’s non-refundable
  • Make sure the individual has enough paid tax to cover the donation
  • Document the conversation with the individual and keep records of this
  • Ensure that there is a Gift Aid declaration in place for the individual
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