Gift Aid - The art of alchemy - UK Fundraising by xiangpeng



                       “Supporting Giving”

Gift Aid - It’s alive and kicking

Andy Jones
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
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
• Changes to claims process - automation?
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
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?
Gift Aid - The art of alchemy

                 Magic Box
Gift Aid - The art of alchemy

 Donate £10                                      Get £10
 Donate £10
                           Process               Get £12.82
 & declaration

Magic equation: Cash + declaration = Gift Aid = 28% more cash
Real success   To pay £900m?

 Success        Paid £652m
So why is it so difficult?
Givens         Problems        Solutions

Legislation    Inventive       Understanding
               Complicated     Knowledge
               Confusion       Automate
               Time            Trust
Unchanged      Understanding   Use others
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
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.
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.
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.
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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