Environmental, social, governance (ESG) Gift Aid

Countdown to Charities Online: Gift Aid - Are your plans in place?

Tania Cohen gives her take on the big changes in Gift Aid due this Spring... The changes From April 2013 a new system for claiming Gift Aid repayments will start replacing ...

Tania Cohen gives her take on the big changes in Gift Aid due this Spring... The changes From April 2013 a new system for claiming Gift Aid repayments will start replacing the current R68(i) claim process. The “print and post” repayment form will be replaced with three new options for charities and Community Amateur Sports Clubs to claim payments, with the options available largely based on the size of the claims. Submitting claims electronically will have a range of benefits. Claims will get processed quicker, while saving postal costs. The new service will be more accurate, with built-in checks that will alert the sender to errors before they submit their claim, reducing the need for claims to be rejected and returned for amendments. The new system will also allow for claims under the new Gift Aid Small Donations Scheme. However, the timescales for implementation will be challenging for various organisations. For some charities this will mean making a change to software. What will your organisation need to do? Make sure that your charity has plans, and potentially budgets, in place to ensure that you will be able to continue to claim on time. What you need to do The changes will affect different charities in different ways so there is no simple checklist of what you will need to do, but here are some considerations to get you started in developing your plans. 1. Make sure that everyone involved in Gift Aid declarations and repayment claims in your organisation is aware of the changes – liaise with fundraising and database leads as necessary, and involve your nominated authorised Gift Aid official. 2. Review the guidance from HMRC and select the claim option most appropriate for your organisation More detailed information about the changes and what charities need to do will be published by HMRC in February. 3. Check your software requirements: a) If you have under 1,000 donors/gifts in a claim and are planning to use the new web form to make claims, you need to check that your current software can edit and save Microsoft Excel or Open Document Format files. If your current software does not allow you to do this, a range of free software packages are available to download from the internet. More information on these packages and how to download them will be published on the HMRC pages in February. b) If you are planning to claim through your own database, for instance because you are planning to submit details of more than 1,000 Gift Aid donors in any claims, you will need to either: i. Speak to your software provider to check that they are aware of Charities Online and are adapting their software to be compatible with the new service. Find out what you need to do to make the changes and what it will cos ii. Buy a software package that can be used with your database and will work with HMRC's online system. New products are being developed specifically for this purpose. However, if you have previously claimed using your database, make sure the software can identify gifts that have already been claimed on. iii. Develop your own mechanism for submitting claims. You can find out more about technical specifications at 4. Look out for further communications from HMRC to your nominated authorised Gift Aid official – especially details of how to register for the Government Gateway and apply for the relevant login details in March. Considerations The timescales are tight – especially for those organisations that currently use a database to produce their claims schedules. While HMRC have briefed suppliers, there is a mixed picture of when solutions will be ready from suppliers and how they need to be implemented. For some charities this may mean a database upgrade to install the new functionality, so ensure there is capacity in place to do this and also schedule it at an appropriate time in case the database is unavailable to users while the changes are made and tested – March/April can be busy fundraising periods for charities or schedules may be affected by financial year end plans and reporting. If you have a bespoke database and need external programmers to make the changes, book them in advance – remember that a number of charities will be looking to make the changes at a similar time. There may also be a period at the end of March while HMRC makes its own database amendments when repayments may not be made. Consider any impact that this period, or any delays that you have in moving to the new claim system, may have on your cash flow. While umbrella bodies are pushing HMRC for a transition period between the systems to give charities longer to prepare, there has currently been no agreement that this will happen. Put your plans in place for the changes to make sure that your charity doesn’t miss out.         Tania Cohen is a freelance consultant « Back to all blog posts