Getting Gift Aid right

Getting Gift Aid right

Claiming Gift Aid on donations is a valuable way of increasing the value of financial gifts but it is easy to make mistakes when making claims. HMRC’s Charity Outreach team have published a list of common errors and here are some things to watch out for.
Wrong authorised official/agent/nominee submitting the claim
If you have changed personnel or appointed a new agent/nominee you must let HMRC know using the change of details form (ChV1).

Claiming excessive amounts under GASDS
There is an annual donation limit of £8,000 (up from £5,000 since 5th April 2016) that  you can claim under the Gift Aid Small Donations Scheme (GASDS). This is where you can claim Gift Aid on cash donations of £20 or less even if you do not have a Gift Aid declaration. If you have collections greater than £8,000 then you can only claim up to this limit.

Out of date GASDS claims
Although you can make Gift Aid Claims dating back four years, GASDS runs tax year to tax year and you can only claim back for the previous two years. The Government is proposing to change the time limit to four years as part of an overhaul of the scheme due to go before Parliament this month.

Non-qualifying donations
Make sure that the donation qualifies – make sure that donations are not listed as being from a taxpayer and not for example, from a non-taxpaying spouse.

Errors using the paper forms
If you are still using the old paper forms (ChR1) then then bear in mind the following:

  • Don’t strike through or write ‘N/A’ in boxes that should be left blank.
  • Don’t include additional correspondence – everything should go on the form.
  • Don’t tick the ‘Aggregated donation’ box as well as the name of the donor. If you have a regular donor just enter the donor’s name, address and the date of the most recent donation.
  • Do check the form and include all necessary information as errors will cause delays in processing the claims.

If you are still using the paper forms then why not consider using the spreadsheet that can be downloaded, completed and submitted on-line which can result in faster payment times.

Review your Gift Aid declaration form
It is also worth reviewing the Gift Aid declaration you use. A couple of years ago the declaration became very long winded but this has now been shortened with separate text for Charities and Community Amateur Sports Club (CASC). HMRC’s example declaration for charities can be downloaded here.

Gift Aid is a real bonus for churches but getting it right means less hassle for everyone and you will get your HMRC payment back sooner.

Nick Jones