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Ian Gledhill HMRC (Charities)

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Ian Gledhill HMRC (Charities). 2000/2001 25,100 Charities claimed £221.5 million. Gift Aid Repayment claims. 2004/2005 60,329 Charities claimed £651.1 million. 2008/2009 75,000 + Charities claiming £990 million. Gift Aid Requirements. There are 4 main requirements for Gift Aid

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gift aid repayment claims

25,100 Charities claimed £221.5 million

Gift Aid Repayment claims


  • 60,329 Charities claimed £651.1 million


  • 75,000 + Charities claiming £990 million
gift aid requirements
Gift Aid Requirements

There are 4 main requirements for Gift Aid

  • Donations (a sum of money) must be made to a UK Charity or CASC.
  • Donations must be from a UK taxpayer (individual).
  • Charity / CASC must hold a valid declaration.
  • Charity / CASC must be able to show receipt of donation.
requirement 1 uk charity casc
Requirement 1 – UK Charity / CASC
  • Charity usually registered with Charity Commission (England & Wales).
  • If not, may still be able to apply to HMRC.
  • CASC’s must register with HMRC.
requirement 2 individual uk tax payer
Requirement 2 – Individual UK Tax payer
  • Individual must
  • be a UK taxpayer, and
  • have paid sufficient tax to cover the claim made to HMRC (Charities)
tax to cover example
Tax to cover example




Charity claims


Donor’s tax

- minimum


reduction in the basic rate of income tax
Reduction in the Basic Rate of Income Tax
  • From 6 April 2008 – the Basic Rate of Income tax was reduced from 22% to 20%
  • Tax claimed by charities on every £1 donation was reduced from 28.2p to 25p
  • Government will give 2% transitional relief for 3 years from 6 April 2008 to 5 April 2011.
that tax can be
That tax can be
  • Basic rate (currently 20%)
  • 20% rate (rate deducted by Banks/Building Societies)
  • 10% rate (non repayable tax deducted from dividend payments)
  • Capital Gains Tax
requirement 3 gift aid declaration


Requirement 3 - Gift Aid declaration

Declaration must contain

  • Name of charity
  • Name of donor
  • Donors home address
  • Description of payment(s)*
  • Declaration that payment(s) are Gift Aided
  • Note explaining that the individual must have paid sufficient UK income or capital gains tax to cover the claim
gift aid declaration


Gift Aid declaration

Declaration must contain

  • Name of donor
  • Ideally, we would like to see:- Mr John Smith
  • We will however accept the following combinations:-
  • John Smith J Smith Mr J Smith.
  • We will not accept:-
  • Mr Smith Smith John
gift aid declaration1


Gift Aid declaration

Declaration must contain

  • Donors residential address
addresses on gads i
Addresses on GADs (i)


  • 11, HD8 9QA or Dunroamin, HD8 9QA
  • 11, Park Street, Goole, HD8 9QA
  • 11, Park Street, Goole
  • 11, Park Street, HD8 9QA
addresses on gads ii
Addresses on GADs (ii)

NO ×

  • 11, HD8.
  • Park Street, Goole, HD8 9QA
  • 11 Park Street.
  • c/o Yates Wine Bar, Park St, Goole
retention of declarations
Retention of Declarations
  • Should be kept for a period of 6 years after the last donation (being looked at as part of the budget announcement)
  • Must be available for inspection
  • Can be retained as a scanned document
requirement 4 audit trail
Requirement 4 - Audit trail

Audit trail from each Donor:

Through the Charity’s books & records

and then into the Charity’s Bank account

sample records donor register

Name of Donor





Sample Records - Donor register

Mark Toner  14/8/2000 £5 cash cash book

Eve Powell  5/9/2000 £10 cheque banked 14/9

Mike Keller 6/9/2000 £7.50 cash cash book

Andrew Kayley  15/9/2000 £4 cash cash book

sample records church envelope register

Week 1

Week 2

GA Dec

Week 3

Week 51

Week 52


Stan James  £2 £6 £40

Andrew Kayley  £1 £1 £1 £1 £1 £16

Lola Jones £10 £24

Fred Smith  £250 £250 £250 £250 £5000

TOTALS = £1 £263 £251 £257 £251 £5,080

Sample records - Church envelope register
cheque payments
Cheque payments
  • Name of payer to be shown in Bank paying in book
  • List separately if there are a large number of payments
sponsorship gift aid

Full Name Home Address Amount Total

Please treatas Gift Aid

Clive Webster

21, Worthing Drive,Brighton BN4 1ZP

£1 per Pub


Harry Potts

6, Nottingham Close,Derby D4 2YP

50p per Pub


Bob Blackburn



50p per Pub


Sponsorship Gift Aid

Charity: The HMRC Auditors Benevolent Fund Name of Participant: Ian Gledhill

Event: The 2009 Barnsley Marathon

* you must pay an amount of UK income tax and/or capital gains tax at least equal to the tax that the charity reclaims for donation

sponsorship and aggregated claims gift aid claim simplified procedure
Sponsorship (And Aggregated Claims) Gift Aid claim – simplified procedure

Participant Date of Payment Total Donation Received

Stan Smith 19/05/09 £50.00

Ian Gledhill 21/05/09 £39.00

Jane Brown 28/05/09 £72.00


adventure fundraising in the uk
Adventure Fundraisingin the UK
  • Parachute Jump
  • Abseil down a tall building
  • “3 peaks in 24 hours”
  • “Walk the Pennine Way”
  • “Swansea to Dublin Bike Ride”

All have possible benefits for the participant that affect Gift Aid

what is a benefit
What is a benefit?
  • any item or service
  • provided by the charity or a third party
  • to the donor or a person connected with the donor
  • as a consequence of making the donation
gift aid benefit limits section 5a finance act 1990
Gift Aid benefit limits[Section (5A) Finance Act 1990]

Amount of donation Value of Benefits

£0 - £100 25% of the donation

£101 - £1,000 £25

£1,001 - £10,000 5% of the donation

Note; Maximum limit for a series of benefits given to a donor is £500 per tax year (w.e.f 6/4/07)

membership subscriptions
Membership Subscriptions
  • Membership subscriptions are not Gifts
  • Prior to 6 April 2000 paid under Deed of Covenant
  • HMRC will accept Membership subs as gifts if;

1. The payment does no more than secure membership of the Charity.

2. The payment does not secure a right to personal use of any facilities or services provided by the Charity.

membership subscriptions1
Membership Subscriptions
  • Family Memberships can be Gift Aided - provided the subscription includes membership for the donor
  • Paying other people’s membership cannot be Gift Aided because although payment is to the Charity - Gift is to made to the member whose subscription has been paid.
  • Periodic Newsletters, attending meetings and visiting the work of the Charity - not benefits
donations attracting right of free admission
Donations attracting right of free admission
  • Statutory relaxation in donor benefit rules to view property preserved, maintained kept or created by a charity
  • Must be in pursuance of its charitable purposes
  • The right of admission applies to the donor and one or more members of family
donations attracting right of free admission1
Donations attracting right of free admission
  • Donation must be at least 10% more than the normal admission charge(s)


  • Donation allows the right of admission for a period of at least one year.
not gifts
NOT Gifts
  • The purchase of books, jumble sale items, bedding plants, food, alcohol etc
  • Admission to events e.g. concerts, recitals etc.
  • Golfing fees, Day Trips, Transport etc.
  • Fees to adopt / re-home an animal
  • Raffles, lottery tickets & 200 Clubs
  • Hire of own premises
how does hmrc decide who to audit
How does HMRC decide who to audit?

Risk Assessment process;

  • Problems seen in claims submitted by charity
  • Rapid rise in claims made by a charity
  • No previous audit by HMRC of claims made
  • Information from staff in HMRC about a charity
  • Information from the public / in the press with concerns about a charity’s Gift Aid claims
what records are required by hmrc
What records are required by HMRC?
  • Blank Gift Aid declaration form(s)
  • Appeal leaflets, membership forms, appeal leaflets
  • The selected Gift Aid declarations & Sponsorship forms (paper or scanned images)

Account records - ‘Audit trails’

  • Banking records, Paying-in book, Bank statements, donation envelopes etc.
what will the auditor be looking for
What will the auditor be looking for?
  • A valid GAD is held for every donor on the claim or in the sample selected
  • Donations comply with the legislation – are they all Gifts?
  • That any benefits given to donors do not exceed the statutory limits
  • Audit trails exist to confirm that the donor has made the payments claimed on
prevention is better than cure
Prevention is better than cure
  • HMRC can help in the auditing & testing of new systems and procedures
  • HMRC can audit claims prior to repayment
  • Charities should carry out own assurance checks on claims
  • HMRC can assist charities who identify a problem with their claims
  • Explain Gift Aid to fund-raising staff, Treasurers etc.
what happens when the audit is finished
What happens when the audit is finished?
  • A summary meeting will be held and the results of the HMRC review will be explained
  • Advice will be given to charity on what changes to systems & procedures could be made
  • The potential financial consequences for the charity will be explained
  • A letter confirming the findings of the audit will be sent to appropriate charity official
most common errors
Most Common Errors
  • No declaration held by charity
  • No evidence of receipt of donation
  • Payment not received from an Individual
  • Payment not a Gift
time limits for claiming gift aid
Time Limits for claiming Gift Aid
  • A charity which is a Trust for tax purposes must make any claim within 5 years of the 31 January in the year following the end of the tax year to which the claim relates.
  • A charity which is a Company for tax purposes must make any claim within 6 years from the end of the accounting period to which the claim relates.
time limits for claiming gift aid from april 2010
Time Limits for claiming Gift Aid From April 2010
  • A charity which is a Trust for tax purposes must make any claim within 4 years of the end of the tax year to which the claim relates.
  • A charity which is a Company for tax purposes must make any claim within 4 years from the end of the accounting period to which the claim relates.
further advice
Further Advice


08453 02 02 03

HMRC (Charities) Help Line

Gift Aid, Charity Tax returns, VAT queries, Trading & Community Amateur Sports Clubs (CASCs)




[email protected]