Navigating the new normal

Gift Aid and refunds of advance entry fees – a trap for the unwary


All content on this page is correct as of April 27, 2020

The COVID-19 pandemic has prompted charities to consider refunding donations that allow entry to visitor attractions. Bill Lewis and Susan Shi emphasise the need to tread carefully in this new article.  

Fees charged for viewing charity property (e.g. a day entry fee of £10), are not gifts and do not qualify for Gift Aid. However, an entry fee can be converted into a donation by either of the following routes:

  1. The visitor is asked to pay at least an extra 10% above the normal admission fee (e.g. £10 + £1) The visitor must be given clear information and a clear choice whether to make the additional donation or not); or
  2. The visitor is paying for an annual ticket, which allows admission for at least 12 months.

In both instances the full amount paid by the visitor can become a donation eligible for Gift Aid. The charity will need a Gift Aid Declaration from the visitor. The right to view charity property is ignored as a benefit for Gift Aid purposes.  These options create pricing structures which are separate from the standard entry fee.

Where a charity has received advance payment of the entry fee for viewing its property, and this is no longer possible due to the COVID-19 outbreak, the charity may be considering making refunds of the entry fees collected. This is possible for any entry fees which were not converted into donations. However, if any of the fees were converted into Gift Aid donations, then it will not be possible to refund the payments. Gift Aid donations must not be paid under any condition of repayment. HMRC takes this point very seriously. If refunds are made this could provide HMRC with an opportunity to pounce and seek to deny Gift Aid on all donations made – they could take the view that all donations must have been made under a condition of repayment. 

A charity might be able to fend off HMRC if it can prove there were no terms and conditions which explained refunds would be made in adverse or any other circumstances.

However as an alternative to a full refund, the charity might want to consider other options, such as keeping the payment and allowing the visitors to come back in future, at a date of their choice. This will help the charity’s cash flow and many visitors may be keen to support charities at this exceptionally difficult time. This can be sweetened by providing the visitors concerned with another benefit that does not affect Gift Aid, such as a book/literature concerning the charity’s work.

If you have any questions about any of the issues raised in this article, or have any other questions relating to tax and VAT, then Bates Wells are happy to help. Please get in touch with Bill Lewis ([email protected]) or your usual Bates Wells contact.


This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of April 27, 2020.

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