UK taxman ramps up probes into gift aid claims

By added on 22/04/2014

HM Revenue & Customs probed more than a thousand charities for their gift aid tax relief claims in the last financial year, double the number it examined in 2011-12, according to figures out today, reports City AM.

The taxman looked into 1,057 claims compared to 510 in the previous year, statistics published by accountancy firm Wilkins Kennedy showed.

 Partner John Howard said: “HMRC is on the look-out for charities it believes have been set up for tax, rather than charitable, purposes and root out cases where the donors’ main aim is avoidance.

“Although cases of deliberate abuse or fraud are rare, when it uncovers anything suspicious, it’s going to use all the tools at its disposal to take action.”

The use of charities to avoid tax was highlighted last year by an investigation into the Cup Trust, a registered charity which tried to claim £46m in gift aid but had given just over £152,000 to charitable causes.

Margaret Hodge, chair of the House of Commons Public Accounts Committee, said in February that the Charity Commission, which oversees registered charities, was “not fit for purpose”. HMRC grants nearly £1bn a year in gift aid.