As a charity, fund-raising is front and centre. Donations are the lifeblood that keeps the engines running and the valuable services they support available to those who need them.
Being a charity gives you some tax breaks and one is that, for every penny you raise, the tax-man will give you an additional 25% reclaimed from the tax contribution of the taxpayer who made the donation.
The challenge is keeping track of it all.
There isn’t some magical telepathic individual at HMRC who knows who has donated what and can track them down to apply the Gift-Aid. It’s down to each charity to do that. Then the request for gift aid has to be submitted to HMRC.
If you have charity shops, every donation of clothes isn’t really a donation! In reality, people are giving you their bits and pieces to sell on their behalf! They need to sign up for Gift-Aid – but, even if they do, you have to notify every donor when their items sell and advise them of the amount of money their ‘donation’ totals.
Every transaction must be assigned to the donor and that can be labour intensive, especially if it then has to be submitted to a central place for integrating into the submission for HMRC.
Even donations given in cash require a form to be completed for gift aid to be claimed. The revenue from collection buckets and tins isn’t eligible and there are all kinds of rules about the money raised by people and companies doing sponsored activities to generate funds. If any donor gets to benefit in any form from their donation – it doesn’t count for gift aid.
It may seem straightforward – get the donation, ask a donor to complete the gift aid form, submit details to HMRC. But creating the information in the right format can be even more of a challenge. Submissions must be made digitally and that means the submission has to match the required HMRC format.
HMRC offer a downloadable ‘template’, ostensibly to ensure you have your data in the right format to upload. However, it’s not always as simple as that. Many charities find that they upload their templated data only to have it rejected. The reason for the rejection will be given, but it still means that all the data may need to be reformatted.
The frustration of putting all this data together and successfully submitting it means it’s often one of those jobs that keeps getting put on the back burner. In other words – it doesn’t get done consistently.
As Gift-Aid can also be claimed by Community Amateur Sports Clubs, often run by a very few staff and a few enthusiastic volunteers, this job frequently falls through the cracks, it’s too complicated.
You may wonder if it’s worth bothering. Is it worth the cost of someone’s time to reclaim the Gift-Aid due? The secret is in having a system that is easy to follow and everyone uses – so part of the answer may be in creating this and training everyone to use it.
The other part of the answer is to find a way to reduce the time spent on it. That might be solved with Gift-Aider. It’s a software program that collates all the data, either manually input or uploaded on a CSV file and organises it into the format that HMRC accepts – and then submits it.
If your charity or sports club doesn’t have the time or manpower to keep up-to-date with Gift-Aid submissions, it could go a long way to solving that problem – and giving your funds a boost too.
Contact us today to find out more about the Gift Aider on firstname.lastname@example.org or 020 7100 6010.