Reclaiming gift-aid

A bridge club with a turnover of less than £5000 per annum cannot register with the Charity Commission as a Charity. Such a club can, however, register with HM Revenue and Customs to be treated as a charity for the purposes of Gift Aid on annual club subscriptions or any donations to the club. Once registered the club can claim Gift Aid refunds for anyone who pays Income Tax or Capital Gains Tax provided they have completed and signed a Declaration Form. Note that there are no reporting criteria or meaningful restrictions on you if you register in this way. If your turnover is greater than £5,000 pa on a regular basis then you should register with the Charity Commission which is also straightforward.

The process to register with HMRC for is very straightforward and should be easily completed by someone with reasonable computer skills.

Step 1

Complete Form chA1 on the HMRC website. Simply save the form to your computer, complete it and print it off so that it can be signed. Do not make any written changes to the form. See the sample form to help complete your form and the Hitchin Charity registration submission if required (see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/324293/hitchindec.pdf )

Step 2

Attach bank statements and account details as requested in the form.

Step 3

Send the form, bank statements and account details by post to HMRC.

Step 4

After a delay that might be a couple of months, assuming you qualify, HMRC will provide you with a reference code in the format xxnnnnn which will identify you as a charitable organisation. You now need to register with the Government Gateway using this reference code. Go to http://www.gateway.gov.uk/ and register as an organisation but use the name and details of the Authorised Person from your application who is the person who can make claims. You will now be given a 12 digit number - make sure you write this number down as it will not be shown again! This is your user ID.

Step 5

Log into the Government Gateway again using your 12 digit number. Now go through the Government gateway into the HMRC website (logging on again with the same details) and attempt to register as a charity using the reference code that you received in step 4 above, stating that you are the person who will be making Gift Aid claims. You will now be sent an activation code in the post, this can take a week to arrive.

Step 6

When you receive the activation code log back into the Government Gateway and the HMRC site, initialise your organisation as a charity and notify them that you will be making Gift Aid claims. This is the last time you need to use the Government Gateway as from now on you can go straight to the HMRC website to make claims, so bookmark the HMRC website.

Prior to making any Claim

Very important, in order to claim GiftAid you must have a valid tax declaration from each person for whom you are claiming before you claim. A sample is attached. Ask all your members to complete a Declaration Form if they pay either Income Tax or Capital Gains tax. You can combine the Declaration with your membership form.

To make a Claim

Making a claim online is very easy, and can be done in 10 minutes once you get the hang of it.

Download LibreOffice (Open Source software) and then download a blank schedule from the HMRC website. This contains 11 blank pages but you will probably only need 1 or 2 of these depending on how many people you can claim for so you will want to only print the appropriate number of pages.

Fill in the data requested, LibreOffice is very similar to Excel, though a bit slower.

It is important to format your data correctly on the spreadsheet as any errors will cause a rejection. However, the error messages are helpful in making any corrections.

When you save your completed schedule use a meaningful name such as: ABBC 2014 claim 1 and remember where you saved it to. Now go to the HMRC website, and go to make a claim and upload your completed schedule. Just follow the screens and the only difficult question is are you a Corporate Trustee? Answer NO. The schedule will now be checked for format errors and you will be prompted to correct them until you get it right.

You can claim at any time. So, for example, you don't have to wait for stragglers before making the bulk of your claim. There is no limit to the number of claims you may make, but any one claim may only contain entries from one of your tax years.

Note that, strangely, when you receive the payment (usually about a week later and paid straight into the club's bank account) it may actually be a few pence greater than you were expecting. This will be because of a little interest having been added.

Helpful Tips

Authorised Person = Treasurer, who will make claims (to change this name you must fill in a change form signed by 2 Responsible Persons)

Responsible Person = other Committee Members who can later authorise changes.

HMRC's FAQ list is very helpful. Their helpdesk is also extremely helpful, but it may take up to 20 minutes of holding on before you get to speak to someone!

Useful documents

Sample HMRC application - http://www.ebu.co.uk/documents/miscellaneous/sample-hmrc-application.pdf

GiftAid declaration form - http://www.ebu.co.uk/documents/miscellaneous/gift-aid-declaration-2014.doc

If you have any queries please contact EBU Club Liaison Officer, Andrew Urbanski, on 01296 317 206 or at andrew@ebu.co.uk