Does your charity organise fundraising events abroad, such as marathons or trek challenges?

You may be able to claim Gift Aid on participants’ raised sponsorship monies, if the individuals pay the costs for travel and accommodation themselves.

Registration fees or deposits are not eligible for Gift Aid, and where payments are eligible, the sponsors provide a valid declaration.

If you are ‘connected’ to the participant, such as a spouse, relative or company, donations only qualify for Gift Aid if the participant pays the total cost of the trip. This should be borne in mind to ensure that the maximum sponsorship money raised goes to the charity.

HM Revenue & Customs (HMRC) appreciate that your charity or CASC may be unaware of potential connections between participants and their sponsors. However, you must show you have taken reasonable steps to prevent this from occurring, for example, in event literature or sponsorship forms.

Charity subscription payments must be for members only and not give any details of an individual’s personal use of the facilities or service.

Your members are still allowed to:

• Receive your newsletter updates
• Visit your charity to see the work you do
• Take part in charity activities that help you meet your charitable objectives

Due to members having personal access to the club facilities or services, CASC’s are unable to claim Gift Aid on membership payments.

Unfortunately, you cannot claim Gift Aid on these as this is a gift to an individual and not to your charity.

If your church collects donations for another charity, you cannot claim Gift Aid on this money as the money collected is not seen as the church’s income.

You can claim Gift Aid if your church chooses to set up a fund to raise money for a charity. As the collection forms part of the church’s income, Gift Aid is due.

If you sell donated goods on behalf of individuals, you can operate a retail Gift Aid scheme. To maximise the amount raised, charities can sell valuable or collectable items donated either via a public auction or online website.

However, the money raised when selling donated items like clothing does not qualify for Gift Aid.

The shop, auction or website that accepts the donated items must inform the owners that they are acting as their ‘agent’ to sell goods on their behalf and that the owner will give the sales proceeds to the charity as a Gift Aid donation.

The owner has the right to keep all proceeds from selling their items or opt to donate all or part of the total amount. You, the staff, or volunteers operating the charity shop, must explain the arrangement and get the donor to complete a form to appoint you as their agent and give a Gift Aid declaration.

There are three ways of operating a Retail Gift Aid scheme, and you can read HMRC’s detailed guidance here.

If a person buys an item at a charity auction with a retail value that exceeds the benefits limit, you cannot claim Gift Aid.

The donor can choose to split their payment between an amount to ‘buy’ the item and an amount that is a ‘gift’ The value of the auctioned items is subtracted from the amount paid and the remainder must be treated as a donation to qualify for Gift Aid.

You must make sure the value of the item is clear to bidders before they sell.

For rare and unique items, supporters may pay more than its retail price to increase their donation because it is a collectable or valuable item. For example, an original vinyl is more commercially valuable if signed by the artist or band.

Gift Aid benefit depends on the amount that the item fetches in the auction:

If the donation exceeds the donor benefit rules limit, the donor can ‘buy the benefit.’

Inform the donor of the retail cost of the item and that they can buy the item elsewhere when making their successful bid. The ‘excess donation’ qualifies for Gift Aid . We recommend that donors keep evidence of this arrangement, such as letters exchanged, or details of any information given before the auction.

Are you hosting a charity dinner or fundraiser festival?

The tickets you sell to the organised event do not qualify for Gift Aid as the money made from ticket sales counts as a trading profit, not donation.

Only payments that are voluntary donations are eligible for Gift Aid. However, if you set a ticket price for an event and have a suggested donation on top, the donation is eligible.

You must be clear that the suggested donation is optional, and that people can still attend your event without donating. There should be no preference given to ticket holders donating to those who do not.

If you are hosting a donation only event, where people can attend and decide how much they wish to give (if at all!), all donations will qualify for Gift Aid.

The pandemic has resulted in many charity events getting cancelled. Rather than accepting refunds for the ticket value, customers have donated the equivalent sum to the charity. Under pre-COVID-19 rules, charities either missed Gift Aid or would have had to physically refund the ticket price and receive the equivalent amount as a donation. Thankfully, HMRC changed its approach, confirming that Gift Aid is now applicable on all donations equal to the ticket price for events cancelled due to COVID-19.

Initially a temporary measure, HMRC has confirmed this change is now permanent.

If your volunteers incur reasonable expenses for any work they do for your charity, such as train fares, you can reimburse them.

Once you have reimbursed the volunteer, they can choose to keep the money or pay part back to the charity as a Gift Aid payment. Gift Aid will only apply when volunteers make an actual payment to your charity or CASC.

If the expenses you pay a volunteer are more than the costs incurred, the payment is taxable as employment income if they are employed. Otherwise, the costs can be chargeable as a miscellaneous receipt.

Does your charity donate to schools? Or are you involved in running schools or educational trusts?

Only voluntary gifts or payments are eligible for Gift Aid.

For example, you receive ‘voluntary contributions’ from parents or relatives linked to the provision of services or school facilities, these are not charitable donations and Gift Aid is not claimable.

Other payments that are not eligible for Gift Aid:

• Tuition fees
• School holidays and educations trips
• Extra-curricular activities or lessons
• Tickets for school productions

However, donations made to an appeal or charitable purpose may be eligible.

Usually, donations for the following will qualify for Gift Aid, if they are not linked to any provision of service or benefit to the students:

• Non-uniform days
• Sponsored events
• Building or equipment appeals