I do the Gift Aid claim for a small charity that my mother started, and I’ve just completed the claims stretching back for donations over the last 18 months. I am aware that claiming Gift Aid can be daunting, especially for volunteer run organisations: so here are my nuggets on the process.
Understanding the Gift Aid rules is important
Before attempting to claim Gift Aid, it’s critical to understand how Gift Aid works, how to claim, and what donations are and aren’t eligible. For example - donations from companies are out. Donors need to pay income (or capital gains) tax, and the donations need to be explicit donations and not payment for an item in a charity shop or where a benefit of more than 25% of the donation value is given to the donor. Click here for more information.
Get signed declarations
All donations on which Gift Aid is to be claimed need to have a signed Gift Aid declaration from the donor, either for this or previous donations. Getting the form right can be quite a hassle, but HMRC provide sample forms (see link); however, they will need to be adapted as they don’t include any space for telephone numbers, email addresses, or opt-in consent. As the HMRC form is a PDF, you will need to adapt the HMRC version for your charity by re-typing it into Word or a desk top publishing package. Once you have the customised declaration for your charity, every donor needs to sign one.
Getting an HMRC login and password is a job in itself
All Gift Aid processing happens via the HMRC online portal, and you’ll need to have an account to use it. The first step in getting a login is to get an HMRC Gift Aid reference. Unfortunately, this isn’t the same as the Charity Commission number (that would be too simple). Once you’ve obtained a Gift Aid reference, apply for a user ID which arrives in the post. Logging on this time, I had forgotten both my user ID and password; I had to provide them with my HMRC tax reference and the last four digits of the bank account to get a new one (that will teach me to lose the password!).
The forms are clunky and awkward
To claim Gift Aid, you need to complete a specially designed HMRC Gift Aid reclaim spreadsheet. The only problem with it is that it’s a bit clunky – the column width won’t change, so the dates become hashes. This isn’t a problem really, until the application process asks for the date of the earliest donation – and that is the hashed out column.
The screen grab below shows the hashes and the clunky column widths with hanging letters:
Who cares about capital letters? Not me
Entering Gift Aid donors’ details is a pretty time consuming and boring process. A person’s name and postcode contain quite a lot of capitals so I speeded up the process by being grammatically poor and giving up on capital letters.
Being a tech genius, I thought I had foxed the HMRC system – until, that was, I submitted my spreadsheet and the system decided the lack of capitals on the postcodes was an error! Not such a genius after all. Luckily I worked out a way to convert the lower case to capitals in Word rather than rewriting them all. Anybody who thinks the Gift Aid Small Donation Scheme (GASDS) might bypass some of the bureaucracy should read my blog on the topic here.
Reading handwriting isn’t always easy
All the forms I completed were hand written, and it’s not always easy to read peoples hand writing - so if there was any way to get people to type their forms, I would go for it. Unfortunately in my case there isn’t it. It’s probably worth encouraging donors to fill out forms in BLOCK CAPITALS in future.
Gift Aid claims are more fun in a double act
Each donation needs to be entered on the spreadsheet separately – so unless you’re an organisation with a database of details you can export directly on to the HMRC spreadsheet, it’s a pretty slow process. I roped in my wife to help on a sunny Sunday morning, and she read them out while I typed - it was definitely quicker, but whether it was twice as fast I don’t know.
Five hours to reclaim over £400 is time very well spent
Gift Aid reclaims are rather like tax returns for me: anticipating doing them is worse than actually doing them. I input around 150 donations this time, and I reckon it took me about 5 hours of work (including my wife’s time). Our claim, if accepted, should bring in over £400 or £80 an hour for the charity. There aren’t many other ways a volunteer could raise so much money in so little time.
So gift reclaims are bureaucratic, frustrating, and boring - but absolutely worth it for a small charity to do.