How To Claim HMRC Gift Aid For Charities

We fail to claim £600 million in HMRC Gift Aid for charities annually, it's effectively core funding and you can claim up to 4 years retrospectively. We need that money more than ever, but there are different rules and it can be confusing. This Chaity Excellence resource gives you everything you need to make sure you're maximising yours. I'm Scottish, but not an accountant, so I can see the opportunity, but this resource is not professional advice.

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It Encourages Your Supporters To Donate

Gift Aid, can be claimed by charities on donations from UK tax payers.  HMRC adds an additional 25p for every £1 they donate.  

And there's more. 

  • In a CAF survey in July 2020, four in 10 of those who already donate money to charity, said Government incentives such as top-ups make them more likely to give.
  • For those that pay above the basic rate of tax, they can claim claim the difference between the rate they pay and basic rate, on their donation, effectively making the amount they pay you lower.  

Do you communicate this to your donors and ensure that all eligible ones are invited to sign a declaration form, so you can claim?

It's Not Just Registered Charities That Can Claim

You don't have to be a registered charity to claim it.  It can also be claimed by unregistered charities (unincorporated associations) and community amateur sports clubs (CASCs).

But, you have to be registered with HMRC. Not registered? Here's my guide on how to do so and you can make a claim up to 4 years retrospectively; of the end of the financial period you received it in. 

Have You Checked Your Retrospective Claims?

The HMRC example declarations include in the statement that donations may be claimed up to 4 year's retrospectively.

  • Most Money Option.  Create a list of all UK tax payers who have made a donation to you in recent years and check if they have a valid Gift Aid declaration form on file. For those that haven't, invite them to sign one.  Then check if you've been claiming for their donations over the last 4 years.  If you have, at least you're now legal and, if not, claim the restrospective funding.
  • Lower Workload Option.  Repeat the process, but only for donors who have made substantial donations. 

If you think that sounds like a waste of time, I spoke to someone who carries out large scale Gift Aid audits. The largest amount he's found so far was £0.7m. That's not a typo and it's not the total donations that could be claimed for. It's the Gift Aid total.  

Are You Claiming All The Different Types You Could Be?

For donations over £30, donors need to sign a Gift Aid declaration, which must be retained on file. But............ 

  1. For small donations using collections tins/buckets, you can claim for donations of up to £30 (£20 prior to 6 Apr 19), with less administration, under the Small Donations Scheme. Here’s what you need to know.   

And, you can claim Gift Aid for a range of other less well known types of donations:

  1. Membership subscriptions may also qualify for Gift Aid, as long as any benefits are sufficiently small that the subscription can be considered a donation - more here.
  2. If you sell donated goods via a shop, auction or website, you can claim Retail Gift Aid.
  3. You can claim Gift Aid on text donations, but charities often we fail to do so. Here's how to do it.
  4. And volunteer expenses, but only if they make an actual payment, not if they don't claim the expense.
  5. And you can claim Gift Aid for access to view a charity property, subject to certain conditions. 
  6. Fundraising platforms normally automatically collect and pay Gift Aid and some will accept unregistered charities, but they can’t claim this for you until you are registered. However, they should send you regular donation reports. All you need to do is to retain these, until your HMRC registration comes through.
  7. In May 21, HMRC confirmed waiving a refund of a refund or loan can be conisdred as a donation for Gift Aid purposes.

There are specific rules in areas, such as charities involved in running schoolschurch collectionssponsored challenges and events.

NGOs Outside The UK Can Claim Too

If you're based outside of the UK, but have UK donors, it is possible to claim Gift Aid, without registering a UK charity and with HMRC. Find out more here.

How To Claim Gift Aid On Donations

Here’s step-by-step guidance to claiming Gift Aid, here's how to submit your claim online and here's a Gift Aid FAQs and common mistakes list to help you.

If you're a registered charity, but aren't yet registered with HMRC, here's my guide on how to do so.

More Advice On Gift Aid

This short guide doesn't cover every eventuality, such as patron/supporter schemes. You can find out more about these here.

And Gift Aid Is Just One Of Many HMRC Charitable Tax Reliefs

Here is a list of the others, with links to the guidance you'll need to claim these. 

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Get Professional Help, If You Need It

I'm Scottish, so finding ways for you to claim money off the Government is something I'm enthusiastic about.  However, I'm not an accountant, so not professionally competent to offer tax advice, besides which it depends on your circumstances. This guide will help you to identify opportunities you may have missed, but it's not professional advice.   

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