Wikimedia UK v1.0/Gift Aid

This article details information about claiming Gift Aid for individuals who are resident for tax purposes in the UK and who donate to Wikimedia projects (what Gift Aid is, how to claim it, etc.).

See the external links section for other relevant pages.

Abstract

The UK government tops up charitable donations so long as the donor is paying enough income tax or capital gains tax in the tax year in which the dontation is made. The donor has to declare that Gift Aid applies to the donation before it is given.

The current rate is 28.2p for every pound, so the end result is that, if a member of the public donates £50.00 under Gift Aid, the nice tax people give us another £14.10.

Estimate income

The 2005 Q3 fundraiser brought in $200,000, of which around 10% [estimate] was in sterling (that is, around £11,400). If we could claim Gift Aid on 75% of donations, we would have an extra £2,400. Multiplied over four quarters, it could mean an extra £10,000 a year. And with growing donations, would come growing Gift Aid...

Actions to carry out

These will be carried out by the Treasurer, Jon Garrett. If you'd like to help, please contact him on User talk:Jguk.

Registering for Gift Aid with HM Revenue & Customs can only take place once the UK chapter of Wikimedia has been registered as a charity and is operational, but these are the steps to be carried out:

Registering

Once we have sent off the form and registered, we need to appoint an official to make the claims. This would ideally be the Treasurer, but could be someone else (who doesn't mind the paperwork) if the Treasurer is too busy.

Getting Started instructions
ChN1 (PDF) – Nomination of Authorised Signatory/Claimant form. For use to register claimants.

Knowing who is eligible

When we are up and running, we will need to intercept people before they pay via their Paypal link in order to ask them if we can claim Gift Aid on their donation. The Inland Revenue has a sample form. [1]

It is quite simple, and is merely a record of name/address and the amount. We need to keep these details should we be inspected, but all the details are not required for payment submissions. Some more guidance is given here

Claiming

Recording the claims

Firstly, this section taken from HMRC's detailed guidance notes:

3.12.2 A charity must maintain a clear auditable record of declarations, such that it is able to demonstrate that a donor has in fact made an appropriate declaration. Examples of what we are likely to accept as evidence include:

March 2004

written declaration made by the donor or a ticked box confirmation by the donor that they wish Gift Aid to apply to the donation.

a recording of the making of a declaration by the donor or a recording of the donor confirming a declaration where the declaration is pre-recorded by the charity,

a computer record of a declaration template filled in by the donor and containing a link to the donors banking details,

an e-mailed copy of a declaration,

a computer 'screen print' of the declaration sent to the charity,

a scanned image of a declaration

a copy of a mobile phone text message confirmation of a declaration.

Note: the transcribing of declaration given by donors into a database will not satisfy the requirements to have an auditable record as there is no link to the donor.

This gives the impression that either an e-mail or an e-mailed PDF record may be appropriate as permanent evidence. A database (that is dynamic and changable) is not allowed. This area will need to be clarified.

It will also be necessary to maintain records that provide an audit trail linking each donation to an identifiable donor who has given a valid Gift Aid declaration.

Claiming from HMRC

Ideally we need to be claiming £100 or more before they will pay (to save on processing overheads), however quarterly or monthly returns may be better for monitoring and workload balancing.

Four forms are required.

R68 (2000) - Once per claim, this gives our details and how/where to pay out to.
R68 (F) - on which details are entered of income received under deduction of tax.
R68(New Gift Aid) - on which details are entered of Gift Aid donations
R68(TCTR) - on which details are entered of dividends received from UK companies where tax credit transitional relief is claimed.

More detail to follow, once I work this thing out at work! GregRobson.

External links

Gift aid – an overview
Giving to charity by individuals - Gift Aid
HMRC, Charities page – A mini-site devoted to all charity-related tax information.
- HMRC's FAQ page for Gift Aid
- Guidance Notes – Detailed information on claiming.