Every year, around 70,000 charities claim tax reliefs worth billions every year. But as anyone who has ever interacted with the Gift Aid system knows, it isn’t always plain sailing. Errors are quite common, particularly for small charities, and these can hold up the Gift Aid process – delaying payments and creating headaches for both the charity and HMRC. Last year I wrote a blog post based on the common errors that HMRC’s Charities Team reported on their activities. HMRC have very kindly provided this information again, so here are some top tips for claiming Gift Aid and avoiding errors.
Common errors when claiming
1. Make sure that Gift Aid Small Donations Scheme donations are in date
Some charities are making GASDS claims too late, due to confusion with the main Gift Aid scheme. The GASDS scheme runs tax year to tax year and charities can only claim back for two previous years. This is in contrast to Gift Aid, where you can claim for four years. Make sure that you check this before you make your GASDS claims.
2. Wrong authorised official/agent/nominee submitting the claim
Some charities are not getting their authorised official/agent/nominee to submit claims on their behalf and these are being rejected. Charities have to designate an individual to submit Gift Aid claims, and HMRC needs to know who they are. If you have had a change of personnel or want to appoint a new agent/nominee for your charity, then make sure you send a Change of Details Form (ChV1) to HMRC: https://www.gov.uk/government/publications/charities-change-of-details-form-chv1
3. Claiming excessive amounts via GASDS
As referenced last year, a number of charities are claiming more than they are supposed to via the GASDS system, enough though the annual limit has been raised from £5000 to £8000. This is likely to be because charities are entering total donations collected rather than the total eligible amount. If charities collect donations greater than £8000, they should just enter the maximum amount (£8000) rather than the total amount collected.
4. Errors on paper forms
HMRC is trying to eliminate paper forms, and these are still causing problems and slowing down the claiming process. Common errors are: – Rather than leaving boxes that aren’t being filled in blank (as the guidance states), charities are putting lines or N/A in the boxes. This causes problems the forms of scanned. – Charities are not allowed to include additional correspondence, but some are still including additional correspondence. Make sure that you just send the forms. – “Aggregated donation” box ticked as well as the name of the donor. Charities should not tick ‘aggregated’ when they have a regular donor – just the name, address, date of donation and amount will do as per guidance notes.
5. Non-qualifying donations are being submitted
Some charities are submitting out of date Gift Aid donations, joint-donations by two individuals (which are not eligible for Gift Aid) or company donations (which have a separate system). Make sure that you check carefully whether the donations that you are submitting as this can significantly slow the repayment process.
How to avoid errors
Here are a few things that you can do in order to make your claiming process as soon as possible:
- Make sure that you have the right nominated official for making Gift Aid claims
- Don’t duplicate amounts, only select the schedules you need (Gift Aid or Gift Aid Small Donations Scheme)
- If you have an overpayment and are making a tax adjustment on your claim put in the tax amount and not the full donation
- Double check your paper forms to ensure that you haven’t made any of the common mistakes outlined above
- Contact the HMRC Charities Team (0300 123 1073) or send them an queryif you have any questions before you send off your form.
Want any further clarification? Please email the CFG Policy Team (firstname.lastname@example.org)
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