Urgent call ahead of Gift Aid deadline

22nd April 2013

Charities are being urged to prepare for the new system for claiming Gift Aid that goes live from today.

Sector leaders today called for the estimated 100,000 charities who currently claim Gift Aid to review their systems ahead of HMRC’s September deadline when the old system will come to an end. Awareness of the impending changes is thought to be low among many charities.

The changes to Gift Aid were announced in the 2011 Budget. The new process replaces a paper form that charities currently use to claim tax repayments.

HMRC’s new systems enable charities to connect their databases directly to HMRC’s computers, or make claims by uploading data via standard HMRC spreadsheets. An alternative paper form will be available for the smallest charities or those without online access.

Charity finance experts are concerned that the timescale for getting the new processes in place is challenging and that charities are underestimating what is involved.

Experts say that charities must urgently review HMRC’s guidance about the changes and ensure their systems are ready and recording the necessary donor information. HMRC is also being urged to take further steps to highlight the changes to charities, so that they will be able to meet the September deadline.

Sector bodies are calling on charities to contact HMRC with any questions or concerns about the new system, including the costs associated with making the changes.

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.”

Caron Bradshaw, CEO at Charity Finance Group, said:

“We’re pleased with the direction of travel towards online Gift Aid claims, but there is no doubt that the changes are coming in quick and fast and adapting in the tight time-frame will be tough and require investment. It’s really important that there are cross-team efforts, including finance, IT and fundraising, to get to grips with Charities Online so that upfront costs and systems issues are identified sooner rather than later.”

Peter Lewis, CEO at the Institute of Fundraising, said:

“We hope that the move to online Gift Aid claims will speed up payments to charities and reduce administration, but the timescale might be tough for some charities. That’s why it’s important that every organisation who claims Gift Aid prepares for the new system now - we’re encouraging all fundraising teams to make sure they’re ready.”

John Hemming, Chairman of the Charity Tax Group, said:

“Charities Online presents a fundamental change in the way that charities claim Gift Aid. Charities must act now to ensure that they are ready to use the new system and can continue to claim the maximum possible amount of Gift Aid”.

All charities claiming Gift Aid have been urged 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 Scheme.

    - Ends -

    Notes to editor:

    1. This statement has been issued by Charity Finance Group, National Council for Voluntary Organisations, Institute of Fundraising, Charity Tax Group and Stewardship, representing charities as well as finance and fundraising professionals in the sector.

    2. For more information on Charities Online please see joint guidance prepared by sector bodies Charities Online - is your charity ready?

    3. Contact: katherine.smithson@cfg.org.uk or call on 020 7250 8347.

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