Gift Aid Income

17 November 2021

Gift Aid risk areas

Following adaptations to working practices, donation sources, fundraising activities and personnel as a result of the pandemic, it would be easy to overlook the impact on the appropriate processes for Gift Aid claims.

If your organisation is in receipt of Gift Aid, now is a good time to step back and review whether or not it is being claimed appropriately, and to take steps to mitigate new risks and benefit from new opportunities.

Here are a few areas you may wish to consider:

  • Is your charity receiving Gift Aid income from any new sources, such as new electronic platforms or new types of fundraising activities?
  • Have you conducted a recent review of processes, which follows the Gift Aid process from first contact with the donor through to receipt of claims to provide assurance that Gift Aid is being claimed appropriately? Do you have an approach in place to monitor that the process is being operated correctly?
  • Are all volunteers and staff members who interact with the Gift Aid process adequately trained to recognise issues and advise donors on when Gift Aid donations can be made? Can you provide evidence that this takes place in the event of a challenge from Her Majesty’s Revenue & Customs (‘HMRC’)?
  • Is the organisation confident from a governance perspective that the systems in place ensure that correct Gift Aid claims are being made? It should be noted that where Gift Aid volumes are large, a slight error in the process can cause a significant over/under claim very quickly.

What are the risks in getting it wrong?

  • Over-claiming Gift Aid can result in penalties and fines along with repayment of the over-claimed amounts.
  • Not recognising or claiming Gift Aid when appropriate can lead to a loss of revenue for the charity, thereby meaning less funds are available for furthering the charitable work of the organisation. 
  • Good governance of Gift Aid is expected as part of your charity’s tax management strategy and this includes appropriate oversight of claims.  
  • Risk to the reputation of the charity if things go wrong. 

What should you do now?

  1. Firstly, review the above to determine whether there are any potential risk areas.
  2. Where potential gaps or risk areas are identified, undertake timely measures to train personnel, review processes and update procedures and governance to support correct gift aid income recognition.
  3. If any errors are identified, corrective steps and appropriate notification to HMRC should be made.

How can we help?

Online Training Courses

Our online Gift Aid training module is designed to assist you with running the Gift Aid process and help ensure the charity is claiming the right amount.  

If you have a number of volunteers/staff within your organisation who deal with Gift Aid, it can be a very time and cost effective way to make sure everyone has had some basic training in this area.  Making sure that everyone has been trained in the same way will also help achieve consistency in processes and systems.  

Courses can be accessed via our online store and provide access for an unlimited number of users at your organisation. More information can be found on our store link below.

Gift Aid Training - BDO Store

Gift Aid Process Mapping and Opportunity Reviews

Our Gift Aid specialists can assist with a review of your process. By reviewing the systems in place, we will highlight risk areas which should be addressed or considered and propose changes where applicable. 

Such reviews are beneficial in ensuring good governance of claims made as well as ensuring that the charity is making the most of the claims of Gift Aid available. 

Please get in touch if this would be useful to your organisation at this time and we will explore how we can assist.

Queries on Gift Aid

If you have any queries on Gift Aid and the claim process, please get in touch with Paul Knight or Vikki Cook and we will arrange a call to discuss further.