To benefit from Gift Aid, charities need to have several essential processes in place. These include:
1. Registered with HMRC
Charities must be registered with HMRC to claim Gift Aid. This involves completing an application form and meeting certain eligibility criteria.
2. Gift Aid Declaration
Donors must either:
- Complete a Gift Aid declaration to confirm that they are eligible for Gift Aid and give the charity permission to claim the tax relief or;
- Authorise an intermediary to create and give Gift Aid declarations on their behalf such as Swiftaid.
3. Record Keeping
Charities must keep accurate records of donations and Gift Aid claims. This includes recording the donor’s name and address, the date and amount of the donation, and the Gift Aid declaration.
Charities must comply with the regulations and requirements of the Gift Aid scheme, such as ensuring that they are eligible to claim Gift Aid on each donation and that they are using the funds for charitable purposes.
Charities must make timely and accurate claims for Gift Aid. This involves submitting the claim to HMRC and providing evidence to support the claim.
There are also third-party services and software that can help charities to manage their Gift Aid claims and ensure that they are maximising their income from this valuable source of funding.
It’s important for charities to stay up-to-date with the rules and guidelines set out by HMRC to ensure that they are eligible to claim Gift Aid and to avoid any potential penalties or fines.