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Unleashing Gift Aid: Boosting Charitable Giving with Tax Relief

Discover how Gift Aid revitalizes charitable giving by amplifying donations through tax relief, and learn how HMRC's initiatives enhance benefits for charities and donors. Explore the evolution, benefits, and future of Gift Aid.

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Unleashing Gift Aid: Boosting Charitable Giving with Tax Relief

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  1. Gift Aid - It’s alive and kicking Are “Supporting Giving” Andy Jones

  2. Bringing you up to date • April 2005 • Merger of HMIT and HMCE • Now - Her Majesty’s Revenue and Customs or HMRC - a single point of contact for charities • Over-riding theme is “Supporting Giving” • Breakdown perceived barriers • Increase charities using tax relief’s • Increase amount of repayment to charities

  3. What will you see - the future. • The Policy • Charity tax policy developed with an understanding of the sectors needs. • The Practice • More consultation with the sector (Charities Advisory Group CAG) and providers. • Extension of ‘helpline’ to include charities as employers. • Changes to claims process - automation?

  4. Working in Partnership • Small office of just over 100 staff - limitations • We need help. • On subjects • Institute of Fundraising - Payroll Giving • Umbrella groups (Stewardship) • On specialist sectors • UKF - Channel to professional, respected advice • Software - Access to service providers

  5. Gift Aid A new scheme! Gift Aid now in it’s 6th year In 2004/2005 Gift Aid of £652m was repaid to charities Almost 400,000 claims made in year Incentives for donors (tax relief, carry backs) Many mistakes - not registered, arith and transposition, wrong forms, wrong signatory Many charities using it - many not - why not?

  6. Gift Aid - The art of alchemy Magic Box

  7. Gift Aid - The art of alchemy Policy Rules Process Donate £10 Get £10 Donate £10 & declaration Get £12.82 Magic equation: Cash + declaration = Gift Aid = 28% more cash

  8. Real success To pay £900m? £1.5bn+ Paid £652m Success

  9. So why is it so difficult? Problems Inventive Complicated Confusion Time Understanding Fear Guidance Solutions Understanding Knowledge Automate Trust Use others Givens Legislation Rules Process Unchanged

  10. Gift Aid - When to use it What Y/N Comment • Donations (money) Yes • Donations (other) No • Sponsorship Yes Organisation • Auctions Yes/No Care/Risk • Events (Gala’s etc) Yes Care/Risk • Raffles etc No Entry Payment • Debt waivers Yes/No Take care

  11. You earned it make sure you keep it Regulatory role 2004/2005: 326 Audits Recovered £3.84m 1700 Adjustments Stopped £1.21m 575 Enquiries Recovered £1.46m 2601 in total compared to No of charities/claims adjusted by advice given and assistance obtained.

  12. Basic principles Audit trail - three simple steps. Money - follow it all from receipt to use Declaration - Ensure they are retrievable Retention - Current year + 6 earlier ones. Consider automating as much as you can.

  13. Using others HMRC - good source of information and advice and are approachable. Gather and share knowledge from around the sector. Third parties - independent, shared knowledge, practical easy to use processes. Have an established relationship with HMRC and are defining new processes. Help manage records you need.

  14. Measuring success. • How much money can you take from us? • We would like to see: • All tax schemes (Gift Aid, Payroll Giving, SA Donate) more widely used to encourage giving in different ways. Role for charity and advisors • Those schemes used to their maximum e.g. converting more donations to Gift Aid. What could you do? Set yourself targets, use SORP to build a plan.

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