Since 2023, the Trust has been in discussions with HMRC to clarify the eligibility of membership fees for income tax refunds under the Gift Aid scheme. This followed reports that a small but increasing number of u3as had their claims rejected, despite adhering to the Trust’s Gift Aid guidance at the time.
With the assistance of tax advisory firm HaysMac, who liaised with HMRC on our behalf, we established that HMRC had not specifically targeted u3a claims. Instead, they identified potential issues related to "personal benefit" within membership organisations, leading to increased scrutiny of claims from such groups. In some cases, additional investigations into u3a claims were triggered by errors in the original submissions, further intensifying HMRC’s review.
A key area of contention is HMRC’s interpretation that some u3a interest groups involve "teaching," which they consider a personal benefit and therefore ineligible for Gift Aid. While we have clarified that teaching is not part of u3a’s offering, HMRC has cited references to "teaching" on several u3a websites.
The issue of "personal benefit" in relation to Gift Aid claims remains open to interpretation. Despite our best efforts, HMRC has not agreed to a standardised approach applicable across all u3as.
Recommendations for u3as:
- Review and update communications.
Remove any references to "teaching" from your websites, printed or online literature, and other materials. This will reduce the likelihood of HMRC challenging your claims on the grounds of personal benefit. - Submit Claims Carefully.
Continue submitting claims as before, following the Trust’s guidance on "PAYG" and "Inclusive" claims. Ensure all details are accurate to avoid triggering additional scrutiny. - Double-Check Submission Details.
To avoid u3as facing increased scrutiny from HMRC, we recommend that you verify that all required reference numbers and information are correct, including:- Charity Commission Registration
- Gift Aid ID
- HMRC Reference
- Password
- Last four digits of your bank account
- Detailed schedule information (e.g., accurate postcodes, correct titles such as "Mr" or "Mrs").
You can find detailed guidance in the finance section of the information and advice section of the Members area.