With thanks to Buzzacott, and Civil Society Media for this article.
Gift Aid and the Gift Aid Small Donations Scheme are worth £1.4 billion to UK charities annually, and government research in 2018 suggested they could be worth another £600 million. However for many charities Gift Aid is not as simple as it looks.
There are many potential complications in the Gift Aid process and below we have outlined a number of common issues you may need to address to ensure that your charity is claiming Gift Aid correctly and maximising its value.
- Gift Aid declarations must be prepared to meet various minimum requirements – common issues that can invalidate declarations include; insufficient wording, incomplete personal details and declarations not joining up with supporting records for the donation.
- Benefits (e.g. badges, event tickets, literature, commercial discounts) provided to donors in return for their donations must fall within certain limits. Calculating the value of these benefits can be complicated, particularly where diverse benefits are provided (such as in charity membership schemes).
- There are various approved schemes for specific scenarios such as donated goods in charity shops, charity auctions, and viewing charity property. However these schemes have their own separate (and in some cases lengthy) compliance rules which must be followed correctly. Make sure you are aware of and adhering to the rules of the correct scheme.
- Cash collections under the Gift Aid Small Donations Scheme must follow the specific control systems and record keeping procedures for that scheme.
- Donors must give their own money, which can create complications for sponsorship collections such as charity runs, for example. Charities with large amounts of sponsorship income may consider asking for this point to be confirmed by donors in the charity’s own template declaration.
- Sufficient records must be kept for a certain period in the event of inspections. The form of record keeping is not prescribed in legislation and depends on the scale of the charity and its donations.
- Many Gift Aid opportunities are missed. This may be because donations are erroneously thought not to qualify for Gift Aid (e.g. donations from overseas residents with UK income or donations with small benefits), or simply because the charity has not implemented a working Gift Aid system.
- Many charities can maximise the potential of Gift Aid, by planning, implementing and reviewing their current Gift Aid system.
Because Buzzacott is a firm of accountants, they offer to help you with your gift aid. Here is a link to the article as it originally appeared, if you decide you need their help.
There is also an article on their website about claiming gift aid on membership subscriptions, if that is something your charity does.
The Gov.uk page around claiming Gift Aid can be found here, and the Charity Finance Group also has several helpful pages around claiming gift aid, as well as information around Gift Aid Awareness Day (October 3).