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Gift Aid - It’s alive and kicking. Are “ Supporting Giving”. Andy Jones. Bringing you up to date. April 2005 Merger of HMIT and HMCE Now - Her Majesty’s Revenue and Customs or HMRC - a single point of contact for charities Over-riding theme is “Supporting Giving”
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Gift Aid - It’s alive and kicking Are “Supporting Giving” Andy Jones
Bringing you up to date • April 2005 • Merger of HMIT and HMCE • Now - Her Majesty’s Revenue and Customs or HMRC - a single point of contact for charities • Over-riding theme is “Supporting Giving” • Breakdown perceived barriers • Increase charities using tax relief’s • Increase amount of repayment to charities
What will you see - the future. • The Policy • Charity tax policy developed with an understanding of the sectors needs. • The Practice • More consultation with the sector (Charities Advisory Group CAG) and providers. • Extension of ‘helpline’ to include charities as employers. • Changes to claims process - automation?
Working in Partnership • Small office of just over 100 staff - limitations • We need help. • On subjects • Institute of Fundraising - Payroll Giving • Umbrella groups (Stewardship) • On specialist sectors • UKF - Channel to professional, respected advice • Software - Access to service providers
Gift Aid A new scheme! Gift Aid now in it’s 6th year In 2004/2005 Gift Aid of £652m was repaid to charities Almost 400,000 claims made in year Incentives for donors (tax relief, carry backs) Many mistakes - not registered, arith and transposition, wrong forms, wrong signatory Many charities using it - many not - why not?
Gift Aid - The art of alchemy Magic Box
Gift Aid - The art of alchemy Policy Rules Process Donate £10 Get £10 Donate £10 & declaration Get £12.82 Magic equation: Cash + declaration = Gift Aid = 28% more cash
Real success To pay £900m? £1.5bn+ Paid £652m Success
So why is it so difficult? Problems Inventive Complicated Confusion Time Understanding Fear Guidance Solutions Understanding Knowledge Automate Trust Use others Givens Legislation Rules Process Unchanged
Gift Aid - When to use it What Y/N Comment • Donations (money) Yes • Donations (other) No • Sponsorship Yes Organisation • Auctions Yes/No Care/Risk • Events (Gala’s etc) Yes Care/Risk • Raffles etc No Entry Payment • Debt waivers Yes/No Take care
You earned it make sure you keep it Regulatory role 2004/2005: 326 Audits Recovered £3.84m 1700 Adjustments Stopped £1.21m 575 Enquiries Recovered £1.46m 2601 in total compared to No of charities/claims adjusted by advice given and assistance obtained.
Basic principles Audit trail - three simple steps. Money - follow it all from receipt to use Declaration - Ensure they are retrievable Retention - Current year + 6 earlier ones. Consider automating as much as you can.
Using others HMRC - good source of information and advice and are approachable. Gather and share knowledge from around the sector. Third parties - independent, shared knowledge, practical easy to use processes. Have an established relationship with HMRC and are defining new processes. Help manage records you need.
Measuring success. • How much money can you take from us? • We would like to see: • All tax schemes (Gift Aid, Payroll Giving, SA Donate) more widely used to encourage giving in different ways. Role for charity and advisors • Those schemes used to their maximum e.g. converting more donations to Gift Aid. What could you do? Set yourself targets, use SORP to build a plan.