Gift Aid warning to charities

 Photo: Christian Today

Charities are being urged to ensure they are clued up about changes to claiming Gift Aid.

A new system went live on Monday replacing paper claims forms with an online service requiring charities to connect their databases directly to HMRC's computers or make claims by uploading data via standard HMRC spreadsheets.

Charities have until September to update their systems but Stewardship and NCVO are concerned that awareness of the changes is low among the estimated 100,000 charities claiming Gift Aid.

They fear many charities have underestimated the challenges involved in making the adjustment.

While charities are being advised to review the HMRC guidance with urgency, the organisations are also asking HMRC to take further steps to make sure charities are aware of the changes and able to meet the September deadline.

Kevin Russell, technical director at Stewardship said: "Stewardship is delighted that the Government has responded to the call, in 2010, by members of the Gift Aid Forum for the introduction of an online facility for claiming Gift Aid.

"But charities of all sizes urgently need to make sure that they are fully prepared, internally, to take full advantage of this new facility, and with it, the gateway to benefit from the Small Donations Scheme.

"Failure to act could mean additional time and cost, and loss of much needed cash flow."

Sir Stuart Etherington, chief executive of NCVO, said: "The move to online Gift Aid is welcome. In the long term it has the potential to create efficiency savings for both charities and for HMRC.

"In the short term though, we are concerned that some charities may struggle to get to grips with the new systems by HMRC's September deadline.

"NCVO and our partners are doing everything we can to get the message out there to the sector.

"The race is now on to ensure that the estimated 100,000 charities who claim Gift Aid are aware and ready to begin using the new systems by September."

They have the following advice for charities that have not yet updated their systems to:
• Ensure the right people in their charity know about the changes and when they will happen.
• Read HMRC's guidance on Charities Online available on the HMRC website.
• Make sure they involve IT colleagues and decide which of three new options – an online claim form, claim using own database, claim using paper form -– they will use.
• Check which of the following steps they should take:
- Register with the Government Gateway
- Download and start using the standard HMRC spreadsheets
- Speak to software suppliers or internal software development teams
- Order the new paper forms from HMRC Charities (0845 302 0203)
- Get their Gift Aid claims up to date and check that their Gift Aid declarations remain valid.
• Ensure their systems are collecting all of the required information for a valid Gift Aid claim including a donor's postcode.
• Make sure their Gift Aid processes are robust as HMRC will be better equipped to scrutinise Gift Aid claims.
• Check if they can benefit from the Gift Aid Small Donations Sc.

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