HMRC have published guidance covering support to help charities around processing refunds, accepting donations and claiming gift aid for ticketed events which have had to be cancelled due to Covid-19.
Those events that have been postponed or not cancelled will not be eligible for support through the measures announced.
To help reduce the administrative burden and financial impact on those charities who have had to cancel an event, HMRC will accept that where a person due a refund decides to donate this to charity, the money received meets the requirement of a qualifying donation.
However, to satisfy requirements those charities seeking to take advantage of this measure, must adopt the following process:
- contact the individual who previously purchased the tickets of 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 is non-refundable
- make sure the individual has enough tax to cover the donation
- ensure that there is a Gift Aid declaration in place for the individual
- keep an audit trail, including a copy of the agreement from an individual agreeing to the donation of the cost of the ticket.
Therefore, during the period of Covid-19, charities no longer have to physically refund the ticket price for the individual to re-donate.
