‘Ambiguous’ donor benefit rules brought in three years ago have been clarified by HMRC.

Under guidance published in 2019 charities were concerned that naming of a building after a donor, who had contributed to its construction, would be treated as a donor benefit.

The ambiguity was raised by the Charity Tax Group with the HMRC, which has confirmed that there has been no change in policy. Naming a building after a donor is not a donor benefit, it has assured the sector.

“CTG is very grateful that, once the matter had been drawn to its attention, HMRC acted quickly and positively to clarify the situation,” said CTG chair Richard Bray.

Fresh guidance has now been published by HMRC to clarify 2019’s advice.

This says naming a building after a donor is not considered a benefit “as long as the naming does not act as an advertisement or sponsorship for a business”.

It adds that charities can acknowledge a donor’s gift to a building work through “a printed brochure or on a plaque”.

“This must be a simple acknowledgement and not an advertisement for a business or some form of business sponsorship,” adds the new guidance.

“A commemorative type plaque recording the name of the individual donor and that they provided a donation, would not be considered a benefit. However, a sign which also promoted a business would be an advert and so would be considered a benefit.”

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