Gift aid is an invaluable tool for charities to boost their income. But it’s important to make sure that the gift aid claims process is done correctly. Unfortunately, many charities make common mistakes when claiming gift aid which can lead them to being unable to claim back on the donations made – but with careful consideration and planning, these issues can be avoided, and you can take full advantage of this valuable program.

One common mistake is failing to obtain a written declaration from donors. Gift Aid declarations must be obtained from each donor in order for the charity to claim the appropriate amount of tax relief on donations. Without such declarations, it will not be possible to reclaim the associated tax relief. It’s also important that each donation declaration includes enough information so that HMRC can identify the donor – including their full name and address.

Another mistake is not keeping accurate records of donations. Charities must keep detailed records of each donation, including the amount given, date received and donor details. This information should be held for a minimum of 6 years as HMRC will require it to check claims. Keeping accurate records also allows charities to identify any irregularities in their accounts more easily.

Sometimes charities forget to remind donors that they can gift aid their donations at the time they make them. This means that some potential donations may be missed out on if this isn’t done correctly. So, it’s important that all donors are made aware of the gift aid program in order to maximise income for the charity.

Finally, charities should be aware of the gift aid limits. Gifts of more than £100,000 in a tax year are not eligible for gift aid and claiming for such donations may attract penalties from HMRC. It’s therefore important to keep track of gifts received throughout the year to ensure that no single donor has exceeded the gift aid limit.

By following these guidelines, charities can avoid making common mistakes when claiming gift aid – enabling them to maximise income from this valuable program. Furthermore, ensuring that all relevant processes are followed correctly will protect against any potential penalties or reprimands from HMRC. Ultimately, giving careful consideration to details such as donor declarations and record keeping is essential if you want to make sure your charity obtains the full benefit of the gift aid program.

Contact GoodtoGive for Gift Aid Support

If you are looking to claim Gift Aid for a charity GoodtoGive can help you. Many charitable organisations have gained the tools required to streamline their finances and make the most of donations. To find out more about our gift aid management service and charity accounting services , get in touch with a member of our team at 020 7731 2041.