As charities grow, they need to know how to remain compliant with Gift Aid, but also to maximise the benefit from it too.
Here are our tips on what to keep an eye on as you grow and scale up.
Regular claims
Charities can submit claims as often as they like, provided they meet the minimum claim amount. Keeping on top of your claims also helps with better cashflow.
Keep accurate records
Maintain detailed and accurate records of donations and declarations to make claims smoother and error-free.
Records must be kept for six years after the end of the accounting period they relate to.
A digital system is the most time and cost-efficient way of keeping a handle on Gift Aid as your charity grows.
More complex donations
Events and auctions – typically, only the voluntary donation portion qualifies, not the payment for goods or services.
Membership fees – you will need to determine which parts of membership fees qualify for Gift Aid and ensure declarations reflect this.
Maximising donations
Make sure your donors are regularly educated on the benefits of Gift Aid – what it is, and how it works for them and you. Ideally you want everyone who donates and qualifies for Gift Aid, to reclaim from.
Your higher tax rate payers can claim additional tax relief on their donations, which may appeal to them to make larger donations.
Systems and software
As charities grow, manual handling of Gift Aid will become too much – and it’s before this point is reached that software should be introduced that links to a donor CRM that cross-checks Gift Aid donations to speed up claims and avoid error issues and payment hold-ups.
Advanced Compliance
HMRC might be more likely to audit you as you grow – keep good records and review regularly so that you are ready. Keep up-to-date with Gift Aid policies and HMRC changes / guidelines to ensure full compliance.
Gift Aid nuance
Look at what donations you have and how they come in, to ensure the correct proportions are claimed for. With fundraising, for example, money raised towards a flight for a donor to get to a location for fundraising can’t be claimed for – only the money that is coming to the charity can.
Likewise, non-monetary donations do not qualify for Gift Aid, so a strategy to encourage financial donations is worth spending time on.
Staff training and ongoing support
Make sure staff know exactly what they are doing with Gift Aid, to ensure claims are correct and maximised.
Software is the best idea as a charity grows, which will require training for all staff involved with Gift Aid to ensure accurate and regular claims.
Consider seeking advice also, from a specialist in charity finance, such as an accountant.
Talk to us about scaling up your Gift Aid claims – we can help you with a CRM system, digital Gift Aid claims and support your charity with Gift Aid as it grows.
You can find more in-depth information on Gov.UK
https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-3-gift-aid#chapter-31-introduction