Under HMRC guidance about Gift Aid, membership subscriptions to amateur music groups (if they are charitable organisations) may be eligible for Gift Aid, enabling performing groups to increase the value of their subscriptions from members and add valuable additional revenue.
However, because membership subscriptions are not donations, HMRC would like us to emphasise to groups that individuals must not receive a benefit from their subscription, which then disqualifies the subscription from eligibility.
Tuition as a benefit
Whilst the provision of rehearsal facilities and music etc are not considered to be a benefit to members in this way, any aspect of the group’s activity which provides tuition to individuals (for example through the rehearsal process) is considered to be a use of facilities or services which is not eligible within the Gift Aid scheme. Tuition fees must be separated from a membership subscription in order to make the subscription qualify for Gift Aid on this basis.
HMRC would like us to make this issue clear to amateur music groups. Many groups claim Gift Aid on the understanding that membership subscriptions, which include a contribution towards the cost of a music director, are wholly eligible. We have guidance agreed with HMRC to help members understand this matter fully, and ensure that Gift Aid applications will be correctly detailed in future. Download the guidance note (available to Making Music members only).
Our work with HMRC
As a result of our negotiations with HMRC we have saved our members thousands of pounds recovered via the Gift Aid scheme. We have achieved a position where members are able to assess their own cases and agree to what extent tuition costs feature as a part of the rehearsal process; it is now up to the individual group to make this decision based on our guidance, agreed with HMRC. Read the letter we received from Twickenham Choral Society which explains how our intervention helped to save over £8,000 in Gift Aid.
'This happy conclusion to our problems with HMRC would not have happened without your essential support and assistance and like many amateur music-making organisations around the country, we have reason to thank Making Music for vigorously fighting our corner.' Neil Nicholls, Chandos Symphony Orchestra
Membership subscription payments received before 1 September 2011
Any membership subscription payments your group received before 1 September 2011 may be considered for eligibility for Gift Aid under the old guidance, ie without the need to separate tuition from the membership subscription. The normal claim period applies in this case, which is no later than four years after the end of the accounting period to which the claim relates.
From 1 September 2011 the new guidance applies which involves separating tuition fees from membership subscriptions, and clearly explaining to members in advance how their payments are to be attributed.
Our Information sheet 22 (in the Resources section of our website) has also been updated to incorporate this guidance.
This guidance does not apply to membership subscriptions paid to promoting organisations or friends' subscriptions where a benefit is derived in terms of tickets or discounts on tickets etc. Please see our information sheet for further information in this area.