Gift Aid repayment claims – is your charity compliant?

HMRC have recently launched a One to Many letter campaign relating to Gift Aid repayment claims.

This is an educational letter that has been issued to charities that make use of the “aggregated donations” provisions within their Gift Aid repayment claims. The letter sets out the related rules and requirements and is aimed at supporting compliance.

Aggregated Donations

Charities can aggregate donations of £20 or less from different donors and show them as one entry on their Gift Aid spreadsheet. The total donation on one line cannot be higher than £1,000 and the total cannot include donations associated with admissions to charity visitor attractions.

To claim Gift Aid on aggregated donations, the following needs to be entered on the claim:

• A simple description in the aggregated donations box – for example, “Thursday club”
• The date of the last donation
• The total amount raised

There is no limit to the number of lines on a claim schedule. You should only add together donations that were made within the same accounting period.

Record Keeping

Charities must keep evidence of individual donations and show that they qualify for Gift Aid. Claims cannot be made without evidence and records must be kept for six years from the end of the accounting period to which they relate.

HMRC Agents

Gift Aid repayment claims may be submitted on behalf of a charity by an agent or other representative, however responsibility for the accuracy of the claims remains with the charity’s trustees.

The charity is also responsible for providing their agent access to all records that identify their donors, amount of donations and whether those donors have agreed to Gift Aid.

One to Many Letters

The One to Many approach is where HMRC sends a standard message to many customers, in this case, trustees of charities. The aim is to influence customers’ behaviour so that they are more likely to comply with their tax obligations. A One to Many approach is not a compliance check.

The letters will not be copied to agents, therefore charities may wish to share the contents of these letters with their advisors and discuss any queries with their agents or HMRC directly.

This post was written by Gemma Thake, a Tax Partner at Price Bailey. Price Bailey has extensive experience in the Charites and Not for Profit sector. If you have any questions on the above or related to Gift Aid claims, you can contact Gemma using the form below.