Ticking the Box for Gift Aid

Apparently today is “#Tick the box” Gift Aid awareness day.

And it is certainly great to be encouraging people to “tick the box” which allows people to enhance their generosity to the charity sector by allowing the charity to claim the 25% extra on their “cash” (in the sense of “real money”) donations.

But for many volunteers and supporters of charities (particularly “small” charities) their generosity goes unaccounted for because they fail to “tick the box” on an expenses claim form (often by omitting to submit an expenses claim form in the first place) because it is felt – justifiably – that the burden of bureaucracy that entails just isn’t worth the effort.

And that’s a double whammy !   To which there is a simple solution !

The problems: When volunteers/supporters don’t claim reimbursement of legitimate expenses/purchases on behalf of their charity not only are their charity’s accounts failing to report the true costs of their charities activities.   They are also missing out on the opportunity to claim Gift Aid on the cash-value of those donations-in-kind. And it’s NOT just their charity’s internal bureaucracy that is the problem.   The draconian HMRC regulations on what can – AND CAN’T – be recorded and claimed for Gift Aid are a MUCH bigger problem.   HMRC does NOT allow claims for reimbursement of legitimate expenses and purchases on behalf of the charity to be offset by an equivalent notional donation.   To be valid for Gift Aid, all expenses/purchases MUST be repaid in full and the amount subsequently donated in a completely separate transaction – with BOTH being fully documented in the charity’s accounts (eg: by separate identifiable transactions in the charity’s bank statements).

The solution: Small Charity Support has long had a relatively simple “Tick in the box” solution to that problem.   Not enough word-space to describe it in detail here but – in a nutshell – a “tick box” to tell the treasurer to delay reimbursing an expense/purchase till towards the end of the financial year when it can be paid in a single transaction along with all the other expenses/purchases claims that the individual made during the year.   Then, once that single payment covering all claims that year has been made he/she can donate all, or as much of that as they like, back to the charity for it to claim the Gift Aid. All fully compliant with HMRC rules.   And all recognising both the true costs to the charity and that individual’s generosity in, effectively, donating to them.   For more details on how that works, go to the Small Charity Support website “Example Policies” page and download the “Reimbursing Expenses & Purchases” leaflet (it's towards the end of that leaflet).

PS:  And while you are there, you might also find interesting, on the “Charity Thoughts” webpage, a comment on “Gift Aid – A Gift for the Wealthy ?”