Claiming Gift Aid from HMRC

What is Gift Aid?

Gift Aid is a way for the government to support charities. According to HMRC, ‘you can claim back 25p every time an individual donates £1 to your charity or community amateur sports club (CASC). This is called Gift Aid.’ Each individual must pay income tax or capital gains tax in the UK and have paid enough tax in that year to cover the donation. The donation must be their own money and not donated on behalf of a collective. PTFA chair Louise Skitt told us, ‘We raised an additional £341 in Gift Aid from a sponsored bounce. It took one person filling in an online form for one evening, and it was definitely worth the effort!’

What kinds of donations are eligible?

PTAs who have registered for Gift Aid can claim on many of the donations they receive, but there are exceptions. The donation must be an outright gift with no benefit, in good or services, to the donor. The most popular PTA fundraisers to which Gift Aid could apply are:

• Building and equipment appeals: if you’re asking for donations that go directly to a specific appeal, where the donor receives no benefit
• Events: although event admissions are excluded because of the benefit to the donor, PTAs can request a voluntary donation on top of the admission price, on which Gift Aid can be claimed.
• Sponsorship: as long as the supporter receives nothing in return, donations made through sponsored activities such as a fun run, sponsored read or spellathon, can be subject to Gift Aid. In this case, the sponsor form acts as a multiple declaration form. The recommended method is to include the following boxes for the sponsor to complete:
  • sponsor’s full name
  • sponsor’s full home postal address – as a minimum, HMRC will accept the number (or name) of the house and the full postcode
  • amount pledged
  • amount collected
  • date collected
  • tick box to have amount treated as a Gift Aid donation
  • PTAs can design their own sponsor form or download our Gift Aid sponsorship form and add your PTA name and event details. You will also need to include the date the sponsorship payments were received by your charity. A signature isn’t required to claim back Gift Aid.
• Non-uniform days: Payments from parents to enable pupils to wear their own clothes on a specified day can be Gift Aided as long as pupils are permitted not to wear uniform, whether or not a donation has been made. If the donation is compulsory, then Gift Aid cannot be claimed.

What isn’t eligible for Gift Aid?

Because of the requirement that the donor doesn’t receive any benefit, these popular PTA activities are excluded from Gift Aid:

• buying books, jumble sale items and food
• admission and tickets to events such as fairs, quiz nights and film nights where there is a clear benefit to the donor
• payment for raffle or lottery tickets (including 100 clubs) – the chance of winning a prize, however small, is considered a benefit

What do the parents need to do?

For larger donations, ask eligible parents and supporters to confirm they are UK taxpayers. Ask them to complete and sign a Gift Aid declaration form, which you should then keep on file. This must include the donor’s full name and address and the name of the PTA. Explain to donors that you can’t receive Gift Aid without this information. You only need to ask your supporters to complete one form, which can cover every gift they make to you, or gifts over a time period of their choosing. It can also cover gifts already made. More information and a sample declaration form is available from hmrc.gov.uk. The HMRC website has guidance on completing Gift Aid declarations.

• For more information, read our Gift Aid FAQs
• To read the HMRC Gift Aid pages go to gov.uk/claim-gift-aid
• For further information about the GASDS go to www.gov.uk/claim-gift-aid/small-donations-scheme
• See also: ‘Our regular giving scheme means we can plan ahead’

How can we start claiming gift Aid?

If you do not have an online account with HMRC you’ll need to register and enrol. Apply to HMRC for recognition that your PTA is a charity entitled to claim UK charity tax reliefs; this is a fairly straightforward process. Once approval has been given, your PTA will receive a reference number and confirmation of the date the entitlement to claim Gift Aid begins. If your PTA is based in England or Wales and currently has an income in excess of £5,000 per annum, then you will also need to register with the Charity Commission for England and Wales. If your PTA is based in Scotland, you need to apply to the Office of the Scottish Charity Regulator (OSCR). The Charity Commission for Northern Ireland is still in the process of registering charities but it is still possible to claim Gift Aid as long as you have been granted charitable tax status by HMRC.

Can we claim Gift Aid online?

File your Gift Aid and Gift Aid Small Donations Scheme (GASDS) claims via HMRC’s online service or print and use its paper form.

What records should we keep?

Keep records that show a clear link between an individual’s donation and their Gift Aid declaration. This enables HMRC to trace a donation back to the donor if they need to check that person had paid enough tax to cover what’s being claimed by the charity. PTAs should keep a record of declarations for six years after the most recent donation on which you claimed Gift Aid. As PTA committees often change, it’s especially important that you to keep the records safe and in a place where you have easy access to them. Read more about data protection and GDPR for PTAs.

What is the Gift Aid Small Donations Scheme and can PTAs use it?

The GASDS is designed as a top-up to Gift Aid for donations where it is difficult to get a declaration from a donor, eg bucket collections passed around at a school concert. Charities can claim on donations of £30 or less, for up to £5,000 a year. Cash donations will need to be paid directly into the charity’s bank account. PTAs will need to be claiming Gift Aid already to make use of the GASDS and must have at least two years’ good claims history. You must make a Gift Aid claim in the year you make a GASDS claim. You complete the same forms as for Gift Aid and tell HMRC how much you are claiming and the year the donations were collected. That’s it – there’s no need to provide donor information. From 6 April 2016, you can claim up to £2,000 in each tax year.

How long do we have to wait for the money?

Once you’ve filed your Gift Aid return, you’ll get the payment by BACS within four weeks if you claim online and five weeks if you claim by post.

Go for it!

Gift Aid isn’t right for every PTA, but if you have the resources to do it, and an enthusiastic PTA running appeals and sponsored challenges, it can make a big difference. It’s an ideal project for someone to take on who has good attention to detail and who perhaps isn’t able to get involved in fundraising, or who wants a role they can do on their own.

The above is intended as guidance only. We recommend that you contact the relevant organisations with specific reference to insurance, legal, health and safety and child protection requirements. Community Inspired Ltd cannot be held responsible for any decisions or actions taken by a PTA, based on the guidance provided.