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Finance Act 2012

Background Note

21.HMRC has allowed charitable trusts and charitable companies and eligible bodies to submit income tax repayment claims in advance of filing a tax return (“in-year claims”) under their powers of collection and management, although in law some trusts and all companies are allowed to make a claim only in a tax return.  This applies to claims for repayment of income tax on income such as bank interest and royalties. It also applies in relation to repayments of income tax under Gift Aid but these in-year repayments were put on a statutory footing by paragraphs 4 to 7 of Schedule 8 to FA 2010. However, those changes to the Gift Aid legislation do not work as intended, so Schedule 15 amends the legislation to allow charities to make free-standing claims for Gift Aid and other income tax repayments.

22.HMRC allows registered CASCs to claim Gift Aid repayments on donations made to them provided that the donations are used for qualifying purposes. It is the intention that they should be able to claim Gift Aid in the same way as charitable companies. Owing to an error that occurred when legislation was re-written for Corporation Tax Act 2010, CASCs are not treated in the same way as charitable companies for the purpose of the Gift Aid legislation. Schedule 15 amends the legislation to allow CASCs to claim Gift Aid repayments and to put HMRC current practice on to a statutory footing.

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