Gift Aid does generally apply to donations, but there are special rules within the Gift Aid legislation that allow charities to claim Gift Aid on membership subscriptions if certain conditions are met. As detailed in our guidance above.
Gift Aid is a government tax relief that allows charities to claim an extra 25p for every £1 that an individual donates. There are rules within the Gift Aid legislation that also allow charities to claim Gift Aid on membership subscriptions, even though they are not donations. This guidance is about claiming Gift Aid on membership subscriptions.
- We suggest that you read our general How to claim Gift Aid for your group guidance before reading this guidance.
- We first published guidance on how to claim Gift Aid on member subscriptions in 2012. The guidance on this page (published March 2022) is new and replaces the 2012 guidance. If you have been claiming Gift Aid based on the 2012 guidance, we recommend you read this new guidance and see the FAQs at the end.
Claiming Gift Aid on membership subscriptions
There are rules within the Gift Aid legislation that also allow charities to claim Gift Aid on membership subscriptions as long as the following conditions are met.
- The membership fee does no more than secure membership of the charity
- The fee does not secure personal use of charity facilities or services
Securing membership to the charity includes receiving voting rights and being able to attend the AGM. It would also include receiving a newsletter explaining the work of the charity or the chance to visit the charity and see the work it is doing.
The potentially more complicated part for members is whether the membership fee ‘secures personal use of charity facilities or services’.
Individuals taking part in activities that the charity does to meet its charitable objects is acceptable, as long as taking part in those activities does not mean individuals receive any personal use of the charity’s facilities or services as part of this.
Therefore the key question to ask is: do members get personal access to facilities and/or services as part of their membership?
- If the answer is no, you can claim Gift Aid on their subscription
- If the answer is yes, then you can’t.
How does that apply to music groups?
Performing groups
There are several factors to consider when assessing personal use of facilities and/or services. But broadly speaking, if the membership subs cover normal rehearsals, practices, and performances and nothing more – you can claim Gift Aid on the subs.
It is about the membership fee granting access to personal use of facilities and/or services. So, if members do get personal use of services / facilities it is better if they pay for these separately outside of the membership fee. This will mean their membership fee could still have Gift Aid claimed on it. The separate payment for access to the service could not have Gift Aid claimed on it.
The HMRC guidance about what might be personal use of facilities and/or services is not extensive but it does give some examples.
"3.37.5 Similarly, the opportunity to take part in activities by which the charity carried out its charitable objectives are acceptable as long as the activities do not amount to making personal use of its facilities. So, a youth organisation that provided various activities in furtherance of its broader educational objectives would not be regarded as providing services or facilities for personal use."
Applied to a performing music group, this suggests a member taking part in rehearsals and performances would be classed as taking part in activities that the charity does to meet its charitable objects – so that alone would probably not count as personal access to facilities or services.
Tuition: the guidance goes onto say: "3.37.6 Membership subscriptions that secure the right to personal use of facilities or services are not gifts. So, for example, subscriptions that are made in order to obtain for an individual or individuals’ tuition, coaching or other educational instruction are not gifts."
So, tuition is a factor that members have to consider when considering personal use of services. HMRC put the focus on it being personal and individual access to tuition or educational instruction. Our reading of this is that group activities, including rehearsals to play a specific piece the way the music director/conductor wants, are undertaken in the furtherance of the charitable objectives and are not personal use of the facilities, whereas general one-to-one tuition or group tuition on how to sing better or play better would be regarded as tuition.
Groups will have to assess their own activities and decide if members get personal tuition. We have provided what we think might be some common scenarios and examples below.
Other personal use: there might be other types of personal use too. For example, if a member borrows a band instrument to play with another orchestra, or providing concert tickets to a family member free of charge.
Promoters
For promoting groups that offer memberships, tuition won’t be a factor, but there will be other considerations. The guidance says:
"3.37.6…Similarly, subscriptions to a sports charity or a charitable film society are not acceptable if they secured for members the free or discounted use of, say, a golf course or a swimming pool or the viewing of films that are not available on similar terms to non-members."
So, if the membership entitles the member to either free or discounted event tickets, that are available to non-members at full price, this would be personal access to facilities/ services and so the membership fee cannot be treated as a gift.
Some key points
Because the legislation allows for charities to treat member subscriptions in a similar way to gifts, but they are not actually gifts, the benefit rule that normally applies to donations (see our How to claim Gift Aid for your group guidance) does not apply to membership subscriptions. They either:
- do not include access to personal use of facilities or services, and you can claim Gift Aid against all of the fee.
- or they do include access to personal use of facilities or services, and you cannot claim any Gift Aid against any of the fee.
Another important point is that it is about the right to access personal use of facilities or services, not the actual use of them. So, if you had 60 members all paying £100 for membership, and 10 members used personal services as part of that £100, then you could not claim Gift Aid on any of the membership subs as, in theory, all 60 members have the right to personal use of services or facilities, even if only 10 actually do.
Scenarios for music groups when assessing tuition
Below are some common scenarios for groups and how they might apply when defining whether members get access to personal tuition as part of their membership fee. These are generalised scenarios and should not be used as template reasoning to justify your own activities. They are designed to provide a framework to help you start your thinking about personal tuition and your own activities.
- Rehearsals and performance schedule process
The group works to a standard rehearsal and performance routine - for example, 10 rehearsals per term working towards and preparing for a performance at the end of it. Sometimes they have sectional rehearsals also working towards the performance. This process is probably not personal tuition. Members might be learning new repertoire or developing techniques, but it is working towards a performance – so is part of the activities the charity does to meet its objects.
- General practice schedule
A group does not have a strict rehearsal performance routine. They might organise one performance of their own each year but perform at events organised by others the rest of the time. Some rehearsals are geared towards performance preparation and others are more general practice sessions of music they are likely to perform when invited or booked to perform.
This process is probably not personal tuition. Members might be learning new repertoire or developing techniques, and while not every session is geared towards a specific performance preparation, more general practice of repertoire to perform could still be classed as the activities the charity does to meet its objects.
Example calculation (scenario 1 and 2)
- Membership fee = £100
- Members get:
- Voting rights and right to attend AGM
- Attend regular rehearsals and take part in performances
- No individual lessons/tuition
- The £100 membership fee can have Gift Aid claimed on it.
- Group workshops for members only
The group has a standard rehearsal and performance routine and occasionally offers additional workshop sessions to members only. For example, a workshop leader running a session on specific skills, such as a gospel singing or jazz improvisation. If this was included as part of the membership fee, it would probably be classed as personal access to services – so the membership fee could not have Gift Aid claimed on it.
If the session was paid for separately by members, in addition to the membership fee, then the membership fee could have Gift Aid claimed on it.
Example calculation A
- Membership fee = £100. Members get:
- Voting rights and right to attend AGM
- Attend regular rehearsals and take part in performances
- Access to occasional group workshops to develop skills
- The £100 membership fee includes some personal tuition in the workshop and so cannot have Gift Aid claimed on it.
Example calculation B
- Membership fee = £100. Members get:
- Voting rights and right to attend AGM
- Attend regular rehearsals and take part in performances
- Members pay additional separate fee to access group workshops to develop skills
- The £100 membership fee can have Gift Aid claimed on it.
- Come and Sing/Play day
Come and Sing Play days can be viewed as part of the group’s activities to meet its charitable purposes and would not be classed as personal tuition for members gained through the membership fee.
As such if members have access to Come and Sing/Play days as part of their membership or if they pay for them separately, the membership fee can still have Gift Aid claimed on it.
- Individual lessons
A group has a standard rehearsal and performance schedule and offers individuals access to lessons outside of this schedule. These can be individual, or group sessions aimed at developing musical skills, rather than focusing on rehearsal / performance prep.
If access to these sessions is included in the standard membership fee than the fee could not have Gift Aid claimed on it.
If members pay a basic membership fee to join the charity and then get access to lessons which are paid for separately, the basic membership fee could have Gift Aid claimed on it, but the fees for additional lessons could not.
Example calculation A
- Membership fee = £100. Members get:
- Voting rights and right to attend AGM
- Attend regular rehearsals and take part in performances
- Access to a range of lessons to develop skills
- The £100 membership fee cannot have Gift Aid claimed on it.
Example calculation B
- Membership fee = £50. Members get:
- Voting rights and right to attend AGM
- Attend regular rehearsals and take part in performances
- Members can separately pay for a range of regular lessons to develop skills
- The £50 membership fee can have Gift Aid claimed on it.
- Some one-to-one help from the music director
The group works to a standard rehearsal and performance routine. For example, 10 rehearsals per term working towards and preparing for a performance at the end of it. Some individuals come to rehearsals early or stay late and have coaching sessions with the music director.
- If these sessions are about the music the group is working on then it would still be part of the charitable activities and not personal tuition
- If they are not about the music the group is working but more about skill development:
- if the individuals do not pay extra for these coaching sessions and it is included as part of their membership, then the membership fee could not have Gift Aid claimed on it.
- if there is a sperate arrangement between the individuals and the music director, then it is outside the scope of group activities and would not count as personal tuition gained through the membership fee - so the membership fee could have Gift Aid claimed on it.
Gift Aid FAQs
Why should membership subscriptions qualify at all for Gift Aid? They aren't donations!
Why has the guidance on membership subscriptions changed?
We had bespoke advice from HMRC in 2012 about Gift Aid on membership subscriptions, which we used to produce our previous guidance. We felt this was overdue for review, but HMRC would not review the guidance with us.
Instead, we based the review on HMRC’s publicly available written guidance and worked with tax specialists to get it checked.
We have removed the previous guidance based on bespoke HMRC advice from 2012 and replaced it with the new guidance.
The new guidance is simpler to follow and implement and for most groups will mean they can claim more Gift Aid.
What is the difference between the previous guidance and the new guidance?
The previous guidance was about calculating how much of the membership fee went towards providing personal tuition. HMRC did not offer blanket guidance on what might constitute tuition, but the general expectation was that most groups would be providing some personal tuition. This involved some complex calculations:
- Deciding what constated personal tuition and working out how much of a rehearsal provided personal tuition
- Giving that amount of time a monetary value
Whatever that monetary value was would be subtracted from the total membership fee, and what was left could have Gift Aid claimed on it.
The new guidance is simpler. The decision is: does the membership fee give personal access to services/facilities (which includes tuition)?
- If it does – you cannot claim Gift Aid
- If it doesn’t – you can claim Gift Aid on the full amount of the membership
What might count as providing tuition has also changed, and the focus is now more on personal tuition rather than the rehearsal process (see Can we claim Gift Aid under the new guidance if we have previously been claiming under the old guidance?).
Is personal use of service / facilities just about tuition?
No - it is about personal use of services and facilities. HMRC highlighted that this might include tuition in their written guidance, and we think it is something groups have to consider. But personal use of services and facilities could include other things, such as free tickets or personal use of instruments.
We loan music scores / instruments to members – would this count as personal benefit?
If the purpose of the loan is help them practice in their own time it would count as part of your group’s musical activity. If the loan was about helping members sing/plan in another group this might be considered an individual benefit
Members have access to personal use of services and facilities but they pay separately for this – can we still claim Gift Aid on the membership fee?
Yes. This rule is about whether the membership fee gives access to personal use of services and facilities. If a member has personal use but pays separately for for the facilities or service – i.e. it is not included in the membership fee - then you can claim Gift Aid on the membership fee.
For example, if members pay a termly hire fee for an instrument belonging to your group, as well as paying their usual group subscription, you can claim on the membership fee as the instrument hire is paid for separately.
Members have access to personal use of services and facilities but they pay separately for this – can we claim Gift Aid on the separate fee?
No. Gift Aid is about donations. There are special rules that allow Gift Aid to be claimed on membership subscriptions, even though they are not donations. These rules do not apply to paying for services.
So if someone pays a fee to attend a workshop, for example, that fee cannot have Gift Aid claimed on it, as it is a fee for a service, not a donation or a membership fee.
If access to the workshop was on a donation basis – and it was a genuine donation basis – i.e they could attend for free if they chose not to donate – then you could claim Gift Aid on the donation made.
Some of our members receive personal tuition as part of their membership fee, but not all members do. Can we claim Gift Aid on the subscription fees of those that don’t?
No. The rules about memberships fees and Gift Aid are about the right to have access to personal use or services/facilities. If some members do have access, then in theory all have the right to access, even if they don’t actually use it. As such you could not claim Gift Aid on anyone’s membership fees.
Our member subscription includes a residential course with food, accommodation and group tuition provided - could we claim Gift Aid on this?
No - there is too much personal benefit here. You could consider splitting out membership and the residential costs into separate transactions, the first being eligible for gift aid. You would need to document & justify your reasoning behind the relative amounts.
Can we claim gift aid on the fee paid by non-members to attend a come and sing/play day?
No. This would not qualify as a membership subscription payment, it is paying a fee to access an event / service. However if entry is by way of donation, you may claim Gift aid on the donation:
-
if it was a free choice to make the donation (meaning there is the option of taking part for free) then you could claim on the full donation.
-
if it was a minimum donation - you can only Gift Aid the amount over and above the minimum requested.
Does the person paying the membership subscription have to be eligible for Gift Aid?
Yes. The rule for Gift Aid on membership subscriptions is the same as the rules for donations. The individuals must not pay less Income Tax and/or Capital Gains Tax than the amount of Gift Aid claimed on all their donations and membership subscriptions (not just the ones made to your charity) in that tax year. Otherwise, they will be liable to, and responsible for, repaying any difference to HMRC.
If someone buys membership for someone else, can we claim Gift Aid on it?
It depends.
You cannot claim Gift Aid if the membership fee is paid by an individual on someone else's behalf, unless they are minors.
If someone pays for membership for their child, who is under 18, you could claim Gift Aid on it, providing the normal conditions for claiming Gift Aid on membership fees are met.
Family memberships (e.g. buying membership for whole family a reduced cost) can have Gift Aid claimed on it as long as the normal conditions for claiming Gift Aid on membership fees are met.
Can we claim Gift Aid on membership sub paid on behalf of a minor?
Yes, If someone pays for membership for their child, who is under 18, you could claim Gift Aid on it, providing the normal conditions for claiming Gift Aid on membership fees are met.
Can we claim Gift Aid on Family membership subs?
Family memberships (e.g. buying membership for whole family a reduced cost) can have Gift Aid claimed on it as long as the normal conditions for claiming Gift Aid on membership fees are met. The person who makes the payment must be the person who has given a Gift Aid declaration to the charity.
Can we claim Gift Aid if one half of a couple pays the membership fee for both people?
If you offer a reduced membership fee for couples, then this is essentially like a family membership - and so you can claim Gift Aid as long as the normal conditions for claiming Gift Aid on membership fees are met. The person who makes the payment must be the person who has given a Gift Aid declaration to the charity.
If they are paying 2 lots of full price fees – but just one person is making the payment, then the fee that relates to the person making the payment can have gift claimed on it (assuming the normal conditions are met). But the fee relating to the other person could not be claimed
If the individuals made two sperate payments, you could claim on both (assuming normal conditions are met and they are both UK tax payers)
Do members have to complete a Gift Aid declaration if we are claiming Gift Aid on their membership fee?
Yes, just as you would for claiming Gift Aid on a donation the individual has to complete a Gift Aid declaration. See our How to claim Gift Aid for your group guidance for more information.
If we are claiming Gift Aid on membership fees, do the same rules about Income tax limits apply to the members as apply to individuals making a donation?
Yes, any individual whose payments (membership subscriptions or donations) have Gift Aid claimed on them must not pay less Income Tax and/or Capital Gains Tax than the amount of Gift Aid claimed on all their payments (not just ones made to your charity) in that tax year. Otherwise, they will be liable to, and responsible for, repaying any difference to HMRC.
If we are claiming Gift Aid on membership fees, do the same rules apply to higher rate tax payers as apply to individuals making a donation?
Yes. Higher rate tax payers can reclaim money from HMRC on their self-assessment tax return for any payments they have made where Gift aid has been claimed. See our How to claim Gift Aid for your group guidance for more information
Do the rules about the value of a donor benefit that apply to donations, apply to membership subscriptions?
No - the benefit rule applies to donations, membership subscriptions are not donations, so the benefit rule does not apply. Find out more about the benefit rule and donations in our How to claim Gift Aid for your group guidance.
Can we claim Gift Aid under the new guidance if we have previously been claiming under the old guidance?
If you have previously been claiming Gift Aid by saying X amount of the membership fee was personal tuition and claiming on total fee minus X, under the new system you could not claim because if the fee includes any tuition you cannot claim.
However, you could revisit your tuition calculation, as what previously counted as tuition under the old guidance might no longer count as tuition under the new guidance.
Under the new guidance group activities, including rehearsals to play a piece the way the music director/conductor wants, are undertaken in the furtherance of the charitable objectives and would not count as tuition. For something to count as tuition it would have to be more specific one-to-one tuition or group tuition about how to sing or play better or develop specific skills. Any general improvement that might occur through the rehearsal process would not be classed as personal tuition.
This would mean that you could now claim on all of the membership fee (as opposed to fee minus tuition), because the definition of tuition has changed.
If we switch to claiming based on the new guidance, do we have to provide any information to HMRC when we claim?
No. You just submit your claim to HMRC as you normally would. However, as ever you should keep good records of what you have based your claim on, in case HMRC ask.
If we have claimed using the previous guidance and claimed 50% (for example) can we retroactively increase amount of gift claimed to 100% of subs, based on the new interpretation of HMRC rules?
No. If you have already claimed Gift Aid on a payment you cannot claim on it again.
Can we carry on submitting claims based on the old guidance?
Yes. HMRC have not told us to remove the old guidance. We have updated it because it has not been reviewed since 2012 and we felt it should be reviewed. HMRC would not review it and so we went back to their generic written guidance and received specialist tax advice to produce the new guidance.
We encourage all groups to use the new guidance, and for groups who previously submitted claims based on the old guidance to review their decisions about personal tuition. However, if you have previously claimed under the old guidance and want to continue that way, then you can as this method is not necessarily wrong.
Can we ask HMRC for advice on the basis of our claim in advance?
Gift Aid works on a self-assessment. Groups are expected to operate within the guidance framework and compile and submit their claim on this basis.
HMRC is unable to approve the basis of claims in advance.
Could HMRC review and reject a claim?
Yes. HMRC could investigate and reject any claim if they think it does meet the requirements.
Claims are selected on a risk basis. If a potential problem with a claim is highlighted at HMRC, it will be passed along for review.
Gift Aid is processed on a pay now check later basis. So a claim might be paid and subject to a check at a later date.
Our new guidance is based on HMRC’s written guidance and has been reviewed by a tax specialist. So as long as you are following it, then there shouldn’t be a problem.
The important thing is that you consider and implement the guidance in a fair and reasonable way, and, if asked, can demonstrate your assessment reflects the guidance.
It is a good idea to keep minutes of any meetings where Gift Aid was discussed and clear documentation of how and why decisions were made, and your justification for these decisions.
If there are any issues, you can contact Making Music for help
We hope you find this Making Music resource useful. If you have any comments or suggestions about the guidance please contact us. Whilst every effort is made to ensure that the content of this guidance is accurate and up to date, Making Music do not warrant, nor accept any liability or responsibility for the completeness or accuracy of the content, or for any loss which may arise from reliance on the information contained in it.
