Theatres will be able to claim gift aid when audiences agree to donate the cost of their cancelled tickets rather than request a refund, the government has confirmed.
Cultural organisations across the country and of all sizes are appealing to audiences to consider giving the money they spent on tickets to shows that are now cancelled because of coronavirus, as companies face losing significant proportions of their income from the enforced shutdown.
The government has now confirmed that theatres that are recognised charities are automatically eligible to claim gift aid when tickets are converted to donations.
Gift aid is calculated based on the donor declaring that they pay a basic rate of tax in the UK. This means that a venue can recover £25 for every £100 donation.
In a written question to parliament, peer Theodore Agnew – who is parliamentary under secretary of state for the Department for Education – responded: “Theatres and other cultural venues recognised as charities by HMRC can claim gift aid on freely given donations, as opposed to payments for goods or services, such as admission tickets.
“These charities can claim gift aid on the value of tickets for cancelled events if the patrons have agreed not to be refunded for the cost of the ticket and agree for the same amount to be treated as a donation.”
He added: “The charity will also need to make sure the patrons have made a gift aid declaration for their donations to qualify for gift aid, confirming that they have, or will have, paid enough tax to cover the amount the charity will claim on their donations.”