I sometimes get feedback from clients about the claiming of Gift Aid, and how it can be an arduous process getting this money back from HMRC.
I agree it’s not the easiest task. You’ve got to get your head around HMRC’s open document spreadsheets and figure out what information belongs in which column. You’ve also to gather all the necessary information from what could be a number of different income sources, depending on which platform(s) you use to collect digital donations and/or raise funds.
The terminology used on HMRC’s website is intended to be clear enough, but I can see it through the eyes of those who would argue the opposite. If you don’t know an answer or which box to tick, you don’t know; the site’s explanations don’t give much away. And, whilst you could call one of HMRC’s advisers, this can be an arduous task in itself.
It’s easy to give up at this point, but you should never do so. As overwhelming as it may seem, your organisation’s Gift Aid total is free money that’s just sat there, it’s funds that have already been raised. That in itself is reason enough to persevere or engage someone like me to help you. Even if this represents a small cost, you’ll earn it back with the Gift Aid revenue. Your choice, therefore, is to suffer a small cost in return for a nice, tidy sum of money—or pay nothing and receive nothing.
Gift Aid represents an extra 25p for every pound your donors give you, if they’re a UK taxpayer. Say you added up your donations via JustGiving for the year, and they totalled £7,500. Gift Aid could equal an extra £1,875, and the best thing is, all the information you’d need will have already been collected by the people at JustGiving—you just need to request and download the correct report on the platform. Navigating HMRC’s system is the last hurdle, and once you’ve been through the process once, you’ll find it much less scary second and third time around.
You don’t need to be an accountant to work out what the taxman owes your organisation. You only need a certain level of computer skills and a modicum of understanding about your claim to fulfil and submit it.
Some small charities, fazed by the questions on HMRC’s Gift Aid screens, park their claim. Once it’s on a longstanding to-do list, however, it can easily be forgotten, but this is crazy if funds are as crucial to your cause as they are to most small charities. Why spend time and effort raising more funds in a volatile climate, like the one we’re in, when you could simply get over the HMRC’s hurdles and bank money that’s already been donated—albeit, which is sitting in the taxman’s account rather than yours?
For the purpose of this article, I’ve simplified gift aid donations as a box-ticking exercise that donors complete if giving money via a third-party organisation such as JustGiving. In reality, however, there are many examples of what qualifies for Gift Aid (for instance, on ticket sales to a charitable event), and different ways in which a donor could give your organisation a financial gift. For instance, some older givers may wish to send a cheque through the post rather than donating online. You should never assume whether someone is/isn’t a taxpayer, which means an element of following up and due diligence. To receive what would be a quarter of their original donation in Gift Aid is surely worth a phone call or letter to your benefactor.
I reiterate, don’t put off your Gift Aid claim or ignore what your organisation is due from the taxman. If you need help or support with the process, just give me a call on 0114 350 3354 or email wendy@letssave.biz.
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