Gift Aid recovery depends on obtaining correct details of the donor.
Working for a charity can change your life in the most unexpected ways. Before I started at Crisis, the furthest I had ever run was the 800 metres at school. Last year, I ran the London Marathon for Crisis - and running is now part of my life.
I didn't expect to run the marathon when I joined Crisis, and when I started running the marathon I didn't expect to be having a heated debate, at mile six (when I could still speak), about Gift Aid and the sponsorship of marathon runners. Sprinting off into the distance wasn't an option at this point, with 20 miles of the race still to run.
Last year, Gift Aid and sponsorship was a huge issue, taking up many column inches in the press. Not surprising, then, that some other runners I had not met before (or seen since) joined in and debated the main question that affects charities: when is money donated sponsorship and when is it payment for a place? It's an important topic because Gift Aid limitations have been placed on the latter.
The taxman is actively encouraging charities to claim all that they can.
A Charity Finance Directors' Group conference last week was told that organisations are still not claiming back as much as they could. Aside from the debate about payment for a place, another problem with sponsored events is making sure all the right details of the donor are in place - not always easy when sponsorship forms are involved.
Gift Aid recovery depends on ensuring that either written or oral declarations are in place from individuals. There is no limit on the amount that can be gifted, although there is guidance on the variable levels of benefit a charity can give its donors in return for their donations.
In order for this to work as effectively as possible, charities need to make sure that they have adequate recording and retrieval processes in place for the Gift Aid declarations.
HM Revenue & Customs audits are undertaken on a statistical sampling basis. If, for example, three out of 100 claims are missing, HMRC will claim back from the charity 3 per cent of the value of all the Gift Aid claims that have been made since April 2000 or its last visit. This can only be stopped if a charity can prove that every other claim is in place.
The run that led to me taking part in the marathon was last year's Crisis annual fun run, the Square Mile Run. For this year's event, which takes place on 9 June, my team and I will be trying to maximise our Gift Aid position and increasing our efforts to ensure sponsorship forms include the home addresses of as many donors as possible, not just their work addresses or names.
- The taxman is encouraging charities to claim back as much Gift Aid as they can
- Charities need to ensure they have adequate recording and retrieval processes in place for Gift Aid declarations
- HMRC audits are undertaken on a statistical sampling basis.