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What Are Aggregated Gift Aid Donations?

You can ‘aggregate’ (add together) donations of £20 or less from assorted donors and present them as a single monetary income item. The total donation on one line cannot be higher than £1,000. (You will need to keep evidence of the individual donations and that they are gift aid applicable).

To claim Gift Aid on aggregated donations, you don’t enter the name and address details of individual donors as this will delay your repayment claim, you can just enter a straightforward description like ‘Wednesday club donors’, the date of the last donation and the total amount raised. This saves valuable time in the data input process without losing any Gift Aid income.

AdvantageNFP Fundraiser users can now combine batches of income, such as donations, that are valid for the claiming of Gift Aid into a single monetary income item, which can subsequently be included in the next Gift Aid online claim.

To read the HMRC rules around Aggregated Gift Aid claims please take a look at the following page on their website, specifically the “Aggregated Claim” section at the end of chapter 6.6:

This indicates that only donations up to the value of a maximum threshold (currently £20.00) can be included in an aggregated donation and that you should keep an audit trail linking the aggregated donation input in AdvantageNFP Fundraiser to the paperwork proving that all donors in the aggregated donation provided Gift Aid Declarations and that each donation was no more than the maximum threshold.

The maximum total amount of a single aggregated donation that can be input into AdvantageNFP Fundraiser is set at £1000 per tax year.

This could also be particularly useful now GDPR has come into force, in that some new donors may indicate that they do not wish to be contacted yet provide a Gift Aid declaration. In this instance you could decide to combine that donation with any other such supporter donations in AdvantageNFP Fundraiser and not create such supporters as new parties within the database.

Posted 12 weeks ago

Gift Aid Small Donations Scheme – Gift Horse or Old Nag?

Posted by Redbourn Business Systems on Friday, July 6, 2012 Under: Fundraising & Gift Aid

We’re all familiar with the proverb of “never looking a gift horse in the mouth”, but in the case of the newly introduced Small Charities Donations Bill it would seem appropriate for small charities to ignore that advice and look carefully at what’s actually on offer.

The new bill will allow charities and amateur sports clubs to claim “Gift Aid” on individual gifts of under £20 without a Gift Aid form, meaning there is no need to collect donor’s details, up to a total value of £5,000 per year.   Probably aimed at smaller organisations, and especially those with cash collections, e.g. street collections, collection plates etc.  the offer of financial help from the Government appears worthy of further investigation. 

Let’s look at the detail. 

This is not strictly Gift Aid, as the money paid out by HMRC will be classified as public expenditure, not tax relief.   Will charities care?  Probably not, but in the current economic climate and repeated U-turns I question how long this scheme will remain in practice. 

The scheme allows the charity to claim for “Gift Aid” at the usual tax rates, on income up to £5,000 per year, so in reality the benefit to the charity is limited to £1,250 per year.  That’s a reasonable income for smaller charities so not something to be dismissed “out of hand”.  Especially as one would hope that the administration effort would be minimal.   In principle, that’s the case, but sadly only if you’ve been claiming Gift Aid for at least three years in the past seven years, and you are limited to claiming £2 under the Small Donation scheme for each £1 you claimed last year in Gift Aid.  So, to receive the full £1,250 this year your charity will need to have claimed and have received back from HMRC at least £625 in Gift Aid last year.  

To further complicate matters for the smaller charity you will need to ensure that the maximum individual donation received is no more than £20.  In practice I cannot see how you will know, given that the whole scheme is apparently aimed at cash collections.  Presumably you just remove the £50 notes and the rest is acceptable?    

HMRC has also confirmed that connected charities, those sharing trustees and purposes that are “the same or substantially similar” will be prevented from claiming two sets of payments.   

Now, I’m broadly in favour of the idea, and I can see it working for the smaller charities that I fundraise for, but considering this is supposedly a method of claiming “Gift Aid” with less administration, the reality seems far removed from that original idea.   After consultation with organisations and suppliers, including Redbourn, the final bill has been simplified from the original proposal.  That had even more complex rules and restrictions.   Still, I can’t help feeling that HMRC could do better than this and provide a genuinely simple way for smaller charities to claim Gift Aid.

Meanwhile, at Redbourn, we’ll continue to do our bit as a CRM provider by demystifying and automating the Gift Aid process as much as we can with our Gift Aid software.  Oh, and I’ll continue to put cash in the bucket when I walk past a street collector, hoping that they may be able to benefit further from my contribution under the new scheme – always assuming their charity understands the “red tape” and meets the rules.                                                                                                                            

Steve Cast

In : Fundraising & Gift Aid 

Tags: "gift aid" "gift aid software" "small donations scheme" "donor" "small charities donation bill" "hmrc" "cash collections" "redbourn" 
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