ALERT for CICs! ('Local Giving' and Gift Aid)

[Cecile Gillard]

Please be aware CICs cannot qualify to receive Gift Aid donations (because a CIC is not a charity).

So CICs cannot take part in the 'Local Giving' initiative (that is an initiative for charity fundraising).

CIC law specifically forbids a CIC from being a charity.

[John Mulkerrin]

Hi Cecile

You are absolutely right that a CIC cannot be a Charity, but im very happy to confirm that CICs receiving project approval by Localgiving.com to list on their website do indeed qualify for Gift Aid.

Only CICs Limited by Guarantee will be considered, and the activity itself must be judged as Charitable Activity to qualify.

LocalGiving claim the relief and we have seen perhaps hundreds of CICs go through the process, there are approximately 20 CICs listed on there at the moment.

If you look at HMRC guidelines in detail it is the activity itself that is judged as qualifying, this allows partnering with LocalGiving as the Charity vehicle.

[John Mulkerrin]

** this activity is obviously in line with LocalGivings own Charity status

[Cecile Gillard]

Hi John

One of the fundamental tax law conditions for a Gift Aid donation is that the organisation receiving the donation is a charity under English law (has charitable purposes for the public benefit etc and is recognised by HMRC as a charity for tax purposes etc). As you know, a CIC cannot be a charity under English law. So something is going wrong here! 

[John Mulkerrin]

LocalGiving receive the donation as they are registered with HMRC and pass it on to the CIC as an unrestrcited grant!

[Cecile Gillard]

They may be able to collect donations and give to a CIC (I don't know the detail of the scheme) but it cannot be a donation with Gift Aid (the tax law rules on GA cannot be met).

[John Mulkerrin]

Ive been recommending them to CICs for years! Quite a few have already used it successfully.

You should go and have a look at their site Localgiving.com, there are over 20 CICs on it at the moment

[Cecile Gillard]

Full HMRC Gift Aid guidance notes on this link:

https://www.gov.uk/government/publications/charities-detailed-guida...

[John Mulkerrin]

I remember ploughing through all this in detail a few years ago to confirm everything around this issue.

In essence LocalGiving is the Charitable Foundation that receives the Gift Aid and the CICs are projects.

You should head over to their site, other non charity groups can list projects too. Really good resource in the right circumstances.