Gift Aid is a fantastic way for charities to boost their donations by 25% at no extra cost to their donors. However, many charities miss out on thousands of pounds each year due to avoidable mistakes. Ensuring compliance with HMRC rules and streamlining your Gift Aid process can significantly impact your charity’s financial health.
Here are some of the most common Gift Aid mistakes charities make, and how to avoid them:
1️⃣ Failing to Obtain Valid Gift Aid Declarations
A Gift Aid declaration is essential for claiming Gift Aid. Many charities either fail to collect them or use incomplete forms. Solution: Always ensure your declaration forms include the donor’s full name, home address, and a clear statement confirming their taxpayer status. Digital declarations can also help streamline this process.
2️⃣ Claiming Gift Aid on Ineligible Donations
Not all donations qualify for Gift Aid. For example, corporate donations, donations from non-UK taxpayers, and payments for events or raffles are not eligible. Solution: Carefully review HMRC’s eligibility guidelines and keep proper records to ensure only qualifying donations are claimed.
3️⃣ Not Keeping Proper Records
HMRC requires charities to maintain accurate records for at least six years. Missing or incomplete records can lead to rejected claims or even penalties. Solution: Implement a system to securely store Gift Aid declarations and financial records, whether digitally or physically.
4️⃣ Missing Out on Gift Aid Backclaims
Did you know that you can claim Gift Aid on donations from up to four years ago? Many charities miss out on this opportunity simply because they don’t check their past donations. Solution: Review your records and submit backdated claims before they expire. If you’re unsure how, we can help!
5️⃣ Not Registering with HMRC Properly
Before a charity can claim Gift Aid, it must be recognized by HMRC for tax purposes. Some charities assume their Charity Commission registration is enough, but that’s not the case. Solution: Ensure your charity is registered with HMRC and that all required paperwork is in order before making claims.
How ABBFEM Consulting Can Help
Navigating Gift Aid compliance can be tricky, but you don’t have to do it alone. At ABBFEM Consulting, we help charities register for Gift Aid, recover unclaimed funds, and ensure compliance with HMRC regulations.
Don’t leave money on the table, let us help your charity make the most of Gift Aid!
Final Thoughts
Gift Aid can be a game-changer for your charity, but only if done correctly. Avoid these common mistakes, stay compliant, and watch your donations grow! If you need assistance, reach out to us today.
Have questions? We’re happy to help! Drop us a message or visit our website to learn more.
ABBFEM Consulting – Helping Charities Unlock the Full Potential of Gift Aid