Gift Aid Consultation

Response from the Museums Association

1.0 Introduction

1.1 The Museums Association (MA) is an independent membership organisation representing museums and galleries in the UK and people who work for them.

1.2 The Association has over 5,000 individual members and 600 institutional members. These institutional members encompass around 1500 museums in the UK ranging from the largest government-funded national museums to small volunteer-run charitable trust museums.

1.3 Formed in 1889, it is a charity, receiving no regular government funding, which seeks to inform, represent and develop museums and people who work for them in order that they may provide a better service to society and the public.

1.4 Our response makes some general points, highlights relevant work the MA is involved in and addresses four key areas for improvement.

1.5 In line with the MA's area of expertise and the priorities of member museums, this response will focus on Gift Aid in respect of rights of admission.

1.6 Although much of the work and research referred to in this response applies to all eligible charitable attractions, this response will focus on museums and their experience of Gift Aid.

1.7 Throughout this response the term "museums" is used to refer to all UK museums and galleries unless otherwise indicated.

2.0 General Comments

2.1 We welcome HM treasury and the Office of the Third Sector's commitment to increasing charitable donations to the sector, and support the improvement of the valuable contribution made by the Gift Aid scheme.

2.2 Admissions Gift Aid has become an important and regular source of donated income for many museums.

It is particularly valuable to organisations with a low annual turnover and those who find themselves in competition with national museums (who receive subsidy) to enable free admission.

The MA would like to request reassurance of the long-term continuity of the Admissions Gift Aid scheme and no reduction in the current level of availability or amounts.

2.3 Significant changes to the Admissions Gift Aid scheme may have implications for the financial sustainability of vulnerable museums and their ability to accurately set budgets. In this context we would only support changes that:

a) Improve clarity and understanding for donors and charitable attractions
b) Simplify and standardise procedures
c) Improve the net benefit to charitable attractions

2.4 We are particularly eager to encourage changes to the operation of the Gift Aid system that will increase accessibility and ease the administrative burden for participating organisations, especially small and independent museums.

2.5 The MA is encouraging its member organisations to contribute to the consultation and will continue to involve them in the issue.

2.6 This response draws on the lessons learnt by the Attractions Gift Aid Liaison Group (AGALG) in their efforts to support charitable visitor attractions wishing to claim Gift Aid on admission.

3.0 The AGALG

3.1 The MA is a member of the AGALG, chaired by Ken Robinson CBE that represents museums and other attractions across the country. The group was established to assist with the negotiation of new arrangements for Gift Aid and their implementation.

The AGALG has managed a key channel of communication between organisations and government through sector representatives and liaison with HM Revenue and Customs. The MA recommends HMRC continue to liaise with AGALG as improvements to the system are implemented and audits carried out.

3.2 In July 2007 Tourism South East (TSE) published an independent study sponsored by the Association of Independent Museums (AIM) and supported by the AGALG; 'Measuring the impact of the changing Gift Aid rules on charitable attractions across England between 2000 and 2006'.

Key conclusions from the report will be highlighted in this response, however the MA recommends government consider this research closely as part of the consultation process. The research is included with this response or can be downloaded from www.industry.visitsoutheastengland.com/site/industry-issues/gift-aid-for-attractions

4.0 Profile

4.1 A key function of the AGALG has been to develop standard
branding to improve the public profile of and visitor accessibility to the scheme. The Gift Aid visitor brand includes a logo, standard wording for posters and other marketing materials available from www.giftaidvisitor.co.uk

4.2 The TSE research found that 70% of attractions claiming Gift Aid surveyed in England are using the Gift Aid logo. 67% of these stated the logo was either very useful or fairly useful. This represents an encouraging start to establishing the brand among charitable attractions and its value among visitors.

Government support is now necessary to build on the existing strength of the brand, encouraging its use among all charitable attractions and developing further standard text/graphics. The brand logo and accompanying wording will be particularly useful for museums currently not using Gift Aid on admissions because of the problems in communicating the 10% option correctly to visitors.

4.3 The MA believes a promotional campaign led by HM Treasury and
HMRC is now necessary to build both visitor understanding of the brand, increase organisations' use of the brand and ultimately establish its' transferable value from one charitable attraction to the next.

5.0 Accessibility

5.1 The TSE research shows 26% of heritage attractions claiming Gift Aid pre 2006 are no longer claiming post-2006. This clearly suggests that the new system has become substantially less accessible for those already familiar with it.

Considering the importance of Gift Aid to the income of many museums, this is a worrying trend where the impact on individual museums is largely unquantified.

5.2 The MA would recommend the collection of basic data by HMRC to monitor the value, accessibility and take-up of the scheme by charitable attractions and museums in particular.

Any additional administration to achieve this should be developed in consultation with AGALG to ensure that only necessary and useful information is collected by organisations.

6.0 Ease of Operation

6.1 The results of the TSE research clearly indicate a problem with the implementation of the optional 10% method and the difficulty of securing a voluntary contribution. In comparison those using the annual pass method found this much easier to implement.

Considering that the annual pass scheme is unworkable for museums who either rely on admissions income from repeat visitors or already operate a successful membership scheme, it is imperative that the optional 10% method becomes easier to operate.

6.2 Access to expert advice for museums wishing to implement either method must be readily available and actively promoted as an HMRC service.

Feedback collected by the MA shows that museums that have made use of this service are more confident and positive about the system. Because of the extra guidance that has been issued since April 2006 it would be useful for HMRC to re-run their free workshops to help organisations implement the new rules.

6.3 Museums approaching Admissions Gift Aid for the first time (in addition to those already claiming) or using volunteers to implement the rules would benefit from a simple guidance publication issued by HMRC.

This should assume little or no understanding of the subject and take organisations comprehensively and transparently through the process. Stages in the process could include; why should you use the Gift Aid scheme and are you eligible, setting up data collection systems, promoting Gift Aid to visitors, claiming Gift Aid, the audit process and signposts to other sources of information, advice and support.

6.4 For museums using the annual pass scheme it would be helpful for the number of excludable days to be increased. Museums with multiple special event days are disadvantaged as visitors access the event by gaining admission to the wider building or property.

7.0 Value in the hands of the charitable sector

7.1 In principle museums regard Gift Aid as a valuable system designed to support their charitable aims and encourage charitable donations from the public.

This view is supported by the TSE research which found that the total financial value of Gift Aid claimed by all attractions after the 2006 changes only dropped by 4%. However, heritage attractions saw a much larger decline at 21%. It is also important to note that the average value of claims from heritage attractions is low in comparison to other sectors.

7.2 We have received concerns about the impact of the reduction in the basic rate of income tax from April 2008. Strategies should be explored to minimise the impact of this.

For more information or comment, please contact:

Museums Association
24 Calvin Street
London
E1 6NW

020 7426 6946