Gift Aid allows UK charities to claim back from HMRC the basic rate tax already paid on donations by the donor.   Some branch officers have asked for clarification on how Gift Aid applies to branches and how they can ask for Gift Aid that has been reclaimed to be paid to their branch bank account.

There are two schemes that enable IWA to claim Gift Aid on donations and membership subscriptions.

Gift Aid Scheme

If a member/donor pays tax in the UK and pays sufficient tax to cover what will be claimed back, they can complete a Gift Aid declaration.  A declaration can be made by by filling in the online form.  We can also take declarations over the phone which we then confirm in writing.  We can claim 25p for every £1 received as a donation or a membership subscription and unless indicated otherwise, we can claim Gift Aid on the previous 4 years’ payments.

There are strict rules on what can be sent to the donor/member in the way of a free gift or incentive as the value cannot exceed 25% of their donation if it is less than £100.

Navvies subscriptions, purchase of raffle/event  tickets, payment towards speaker costs, room hire, cakes, etc, are not eligible for Gift Aid to be claimed.

If a donation is intended specifically for the branch by a donor for whom we hold a Gift Aid Declaration, details of the payment should be highlighted in the Branch Accounts so that Gift Aid can be claimed.  This can be requested to be transferred back to the branch or credited to IWA’s general fund.

Gift Aid Declaration forms are available from Head Office, if you would like a supply, please contact Tracy Higgin.

Up to £8,000 of cash donations from bucket collections or collection tins can be eligible for Gift Aid under the Gift Aid Small Donations Scheme (GASD) without the need for Gift Aid Declarations.  However, there are rules to be followed.

• Each donation must be in cash and under £20.
• There should be no requirement to give a donation or a suggested amount, so at a meeting if you were to ask for £2 each towards the tea and cakes, that isn’t eligible.
• The cash should ideally be counted by two people.
• The cash should be banked directly in to an IWA bank account.
• The date, amount , denomination of coins and notes, and where the collection was taken should be recorded in the quarterly Branch Accounts.
• IWA is currently able to claim Gift Aid on GASD donations on an annual basis, this is done after the end of the tax year (not IWA’s financial year) at the end of June which allows sufficient time for branches to submit their Quarter 1 accounts showing any eligible donations.   You can request the Gift Aid to be transferred back to the branch or credited to IWA’s general fund.

Cash donations to IWA may exceed the total for which Gift Aid can be claimed under this scheme, and if this is the case, then an apportionment of the Gift Aid allocated to branches would be made accordingly.

Sale of Goods

Gift Aid is available on monetary donations only.   There is a further Gift Aid Scheme available to charities that operate charity shops, where they sell goods on behalf of the donor and have written authority from the donor for the cash from the sale to be donated to the charity.  As IWA does not currently operate charity shops, we are unable to utilise this scheme.

If you are offered a particularly high value item as a donation from someone who can submit a Gift Aid Declaration, after the sale the payment should be returned to the donor who should then write us a cheque or donate online.   This ensures we have a clear audit trail from the claim back to the donor should it be subject to an HMRC audit.   However, this shouldn’t be something branches are doing on a regular basis.

Transfer of Gift Aid back to branches

Due to the administrative procedures and costs involved in transferring Gift Aid to the individual branches, this will now be undertaken on an annual basis at the end of June.

If you have any questions regarding Gift Aid please contact Tracy Higgin at the Chesham office.