If you are running a charity or community sports club, then you will want to maximise your revenue by making the most of tax rebates with a gift aid declaration. There are a number of gift aid rules to follow, and if the submission covers more than 1,000 donations, you will need to claim gift aid online.
Other ways of claiming gift aid include appointing a collection agency, which will make claims on appropriate donations on your behalf, or an authorised agent, such as an accountant or adviser who can act on the charity’s behalf. To make your own HMRC gift aid claim through Charities Online (https://www.gov.uk/guidance/claim-tax-back-on-donations-using-charities-online) you will need to register.
Organise your information
Once registered with HMRC, you can go to the charities section and make a gift aid declaration. Ensure you have all the required information regarding your charity, including the organisation’s postcode, its HMRC reference and customer account number.
The customer account number may be the last four digits of the charity’s bank account if it was registered before 2013. If you have a customer account number which is only nine digits, then add a zero to the beginning. You will need to create a password, and will then be given a 12-digit ID which will be necessary to access the service.
Once you have your password and 12-digit ID, you will be able to save your work and return to it. Resources for more details include this useful guide from HMRC. (http://www.hmrc.gov.uk/courses/syob4/giftaidsch_guide/) HMRC also has information on the right spreadsheets and software (https://www.gov.uk/guidance/schedule-spreadsheet-to-claim-back-tax-on-gift-aid-donations) to use.
Document donations thoroughly
Donor declarations can be made verbally, in writing, or online. Each method requires similar information to be entered into a spreadsheet, which can be downloaded from HMRC. For each donor, the charity needs to record the person’s title, first and last name, full address, the date of the donation and the amount. If a field in the spreadsheet is not applicable, then leave it empty.
Donors must have paid the appropriate amount of tax, and made a Gift Aid Declaration giving the charity permission to make the claim. Additional Gift Aid rules apply to activities such as sponsored events and charity auctions and HMRC has more information (https://www.gov.uk/claim-gift-aid/what-you-can-claim-it-on) on this.
Deadlines apply, and these differ depending on the charity’s set-up. Trusts must file claims within four years of the end of the tax year in which the donation was received. For sports clubs, CIOs or limited companies, it’s four years from the end of your accounting period. Cash donations which are part of the Gift Aid Small Donations Scheme must be claimed within two years of the tax year’s end. Donation records must be retained for at least another two years.
To claim by post you need ChR1 forms, and to obtain some, ring 0300 123 1073 during business hours. But if claiming for more than a thousand donations, you must use software (https://www.gov.uk/claim-gift-aid/how-to-claim).
If you have any detailed questions or want help with your Gift Aid submission then please contact any of our Blumers who specialise in it.