8. contacts there - it will their company
• prove useful for them to write or sign the
appeal letter. • any procedure or timetable for submitting
• One of your volunteers or supporters applications
may be an
• employee of the company. • whether they might be interested in coming
to see your organisation at work.
• Your clients/users (or their parents) may
work for the company. Visits are useful when discussing bigger
donations with the larger companies, but are
Alternatively, you might be able to tie your difficult to arrange for anything small.
appeal in to a known personal interest of a
director. Almost certainly your appeal will be in the
form of a letter. Make this as personal as
Getting in touch you can. Circular letters tend to end up in the
bin. Make the letter short and to the point.
Generally an appeal through a personal
contact will work the best. But if you haven't Be specific in your approach
got a contact and can see no way of
developing one, then you will have to come Rather than sending out a circular mailing to
up with another link. 100 or 1,000 companies, you will be more
successful if you select a few companies you
As a first step you might contact the believe will be particularly interested in your
company to find out the following:- project, and target your application to them
and their policy. (Many companies will not
• who is responsible for dealing with consider circular appeals as a point of
charitable appeals policy).
• their name and job title Find a good reason why you believe the
company should support you and include
• what information they can send regarding this prominently in
your letter. You may be able to relate what Similarly, a local charity might not want
you are doing as a charity to companies money from a company who has made
which have some relevance to your work; for people in the area redundant. Each charity
example, a children’s charity can appeal to has to judge where it draws the line.
companies, making children’s products
companies, a housing charity to construction Be clear about why you need the money
companies, building societies, etc. Any
relationship, however tenuous, creates a You must be clear about the objectives of
point of contact on which you can build a the work you are raising money for,
good case for obtaining the company’s particularly its time-scale and how it relates
support. If there is no relationship, should to your overall programme of work. Try to
you be approaching that company at all? think in project terms rather than seeking
money to cover basic administration costs.
There may be occasions where a charity will This can be difficult, because most people
not want to accept money from a company in spend most of their money on administration
a related company's support. If there is no in one form or another, so you need to
relationship, should you be approaching that conjure up projects out of your current
company at all? A health education charity activities to present to potential donors. You
may not want to accept money from a can build a percentage of administrative
tobacco or brewery company or from the costs into the costs of the project. If you
confectionery industry, or similarly an relate what you are doing to a specific time-
environmental group may not wish to accept scale, this again makes what you are
a donation from a nuclear power company. applying for more of a project than a
These may feel that as a result of doing so contribution to your year-on-year core costs.
they would be seen to be compromised.
9. Be persistent applications in the future. If they said that
they do not give to your particular type of
Do not underestimate the persistence factor. activity then you know that it is absolutely no
If you do not receive a donation in the first use your going back. If they said their funds
year, do not assume that the company will were fully committed, you can try to find out
never support you. Go back a second and when would be a better time to apply
even a third time. (although it might only have been a
convenient excuse because they did not
If you are going back, mention the fact that want to give to you).
you have applied to them previously,
perhaps saying that you are now presenting Note the response to your appeal and use
them with something different which may be any information you can glean to improve
(you hope) of more interest to them. your chances the next time. People respect
persistence, so it really is important to go
If they give you reasons for refusing support, back again and again.
use them to help you put in more appropriate
How to find out which firms to approach? • The appropriate regional section of
The firms to approach must depend on what • The local Chamber of Commerce.
sort of organisation you are. If you are a • Confederation of British Industry –
national organisation then an appeal to the Regional contacts.
country's leading companies is appropriate. • The Institute of Directors.
Local groups should approach local firms
and local branches of national companies Whichever directories you are using make
which have a presence in their area. All sure they are up-to-date copies. Company
organisations can approach companies in personnel and/or donations policies change
allied fields: for example, theatres can regularly.
appeal to fabric companies.
If you want gifts in kind, you should find likely
You will find the names and other details of suppliers of what you need. Trade
companies in a whole series of useful associations will often provide a list of its
directories and publications. member companies. Another idea is trade
list of its member companies. Another idea is
Sources of information: trade exhibition catalogues which give
details of all exhibitors.
• The Times 1,000
• The Kompass Register of British One big problem is the ownership of
Industry & Commerce – [available in seemingly independent companies. Many
regional sections] companies are in fact a part of a much larger
• Guide to Key British Enterprises concern. In recent years there has been a
• Stock Exchange Official Year Book substantial number of mergers and
• Jordan's Top Privately Owned take-overs, plus the buying and selling of
Companies – [2 volumes] business between corporations. A useful
source of information is the directory Who
To find key contacts in companies: Owns Whom, which has a subsidiary index
listing most subsidiaries of companies
• The Directory of Directors and Who's included in the guide. You can also use
Who are useful for finding out more company annual reports, which (for most
about company directors. companies) can be obtained on request.
• Corporate Register - updated These reports provide good background
quarterly - a guide to makers in UK information on the company, and
Stockmarket companies. occasionally information on the company's
corporate support programme. Some private
For local companies in addition to this (and occasionally public) companies will not
guide: send out annual reports except to
shareholders; in such cases you can go to
10. Companies House to get hold of a copy. The
main offices are situated in Cardiff, In any city or region there will be large
Edinburgh, Belfast and London, with satellite companies who are important to the local
offices in Birmingham, Glasgow, Leeds and economy. These companies will often feel a
Finally there are national and local Some basic don'ts when applying to
newspapers which can provide useful companies
information and ideas about who to
approach. Informal sources or information $Don't write indiscriminate 'Dear
may include the local business school, Sir/Madam’ circular letters to any
rotary, round table, Chamber of Commerce, company you come across.
Business Breakfast Clubs, as well as clients $Don't use any guide you may have
of your auditor, banker, legal advisor or access to as a simple mailing list.
suppliers. $Don't write to a company which
specifically says it does not support
The types of companies that give your kind of work. Don't write to a
Foreign owned multi-national companies company unless at least one of the
Many of the large multi-nationals have global
giving programmes. Some have an • The company has a declared policy
international structure for managing their indicating a specific interest in your
giving with budgets set for each country and group's area of work.
a common policy for the sorts of activity they • The company operates in the same
are interested in supporting. small budget to locality as your group and a clear
spend on charitable projects of its choice. product link exists between your
Others may give each country a small needs and their supplies.
budget to spend on charitable projects of its • You have a strong personal link with
choice. With others, community involvement a senior company officer, or a
policy remains a purely local matter for member of their staff is actively
company management in the country involved in your work.
concerned. • There is some good reason to write
to that particular company. The fact
Leading national companies that the company makes a profit and
your group needs money is not a
Many support large national charities, of sufficiently strong link.
which many have departments set up to
raise money from companies. Some make responsibility to do something to support
grants through regional offices and most will voluntary action and community initiatives in
give preference to charities local to their those areas, and value the good publicity
main operating sites. that this will provide. It is a good idea to form
some kind of relationship with larger
Larger local companies companies in your area
There are also companies that have a owned and the approach will often be
regional remit, such as water, electricity and through the ‘Chairman & Chief Executive’ or
television companies. The support of these ‘Managing Director’, or ‘Senior Partner’.
companies is usually confined within these Most of these companies will have no
regional boundaries. policies about what to give to and may prefer
to give in kind, for example a prize for a
Smaller local companies raffle, or a fundraising event. It might be
easier to approach these companies for this
Almost everyone is targeting the large sort of support in the first instance; and later
companies, because good information is on, (once they have given something), to
available on these for fundraisers and there persuade them to make a cash donation.
is little available information on smaller local
companies. Many of these are privately
11. Constructing an Appeal Letter funds; how the donation would be
spent if it were to be forthcoming, and
Important points to consider:- why you think the company might be
interested in supporting you.
• Think up a project or aspect of your
work that the business sector might • You should attempt to communicate
like to support. Generally, do not the urgency of your appeal.
appeal for administration costs or a Fundraising is an intensively
contribution to an endowment fund competitive business; there is a
(although there will be cases where limited amount of money to give have
this approach will succeed). to ensure that some of it comes your
Recognise that companies are likely way. If it appears that although you
to be interested in some ideas and would like the money now it would not
not others. For exarnple, a drugs matter terribly much if you got it next
charity would be more likely to get year, this will put people off. But don't
money for education than give the impression you are
rehabilitation. An appreciation of the fundraising at the last minute. Show
kind of projects that companies like to them you are professional and you
support will be very helpful to you. have carefully planned your
fundraising appeal. You should also
• Your letter should be as short as try to show that your charity is
possible. Try to get it all on one side well-run, efficient and cost effective in
of A4. You can always supply other how it operates.
information as attachments. Company
people are busy. You can help them • You should mention why you think the
by making your appeal letter short company should support your cause.
and to the point. It should be written This could range from rather
clearly and concisely and be free from generalised notions of corporate
jargon. Someone not acquainted with responsibility and the creation of
what you are doing should be able to goodwill in the local community to
read and understand it and be much more specific advantages such
persuaded to act on it. Give your as preventing children painting graffiti
letter in draft to someone outside your on their factory walls or the good
charity to read and comment on publicity companies will get from
before finalising it and sending it out. supporting your cause. If the firm's
generosity is to be made public, for
• You should state why you need the example through advertising or any
money and exactly how it will be publicity arising from the gift, then
spent. The letter itself should be emphasise the goodwill which will
straightforward. It should include the accrue to the company. Most
following information (not necessarily companies would say that they do not
in this order): what the organisation require any public acknowledgement
does and some background on how it for the contributions they make, but
was set up; whom the organisation most will appreciate and welcome
serves; why the organisation needs this.
a particular item. You can suggest a figure
• As for something specific. It is all too easy by mentioning what other companies are
to make a good case and then to mumble giving. You can mention a total and say how
something about needing money. Many many donations you will need to achieve
companies, having been persuaded to give, this. Do not be unreasonable in your
are not sure how much to give. You can ask expectations. Just because a company is
them to give a donation of a specific amount, large and rich, it does not mean that it
(matched to what you believe their ability to makes big grants.
contribute to be), or to contribute the cost of
12. • If you can demonstrate some form of’ policy to support your type of Organisation
leverage' this will be an added attraction. or to give to charity at all). Persistence can
Company donations on the whole are quite pay. If you have received a donation, go
modest, but companies like to feel they are back again next year. The company has
having a substantial impact with the money demonstrated that it is interested in what
they spend. If you can show that a small you are doing and in supporting you. It may
amount of money will enable a much larger well do it again next year, especially if you
project to go ahead, or will release further had thanked them for the donation and
funds say on a matching basis from kept them in touch with how the 'project'
another source, this will definitely be an developed.
How companies reply to you
• Having written a very short appeal letter,
you can append some background support Many companies will not even reply to your
literature. This should not be a fifty-page appeal. A few may acknowledge receipt of
treatise outlining your latest policies, but your letter, and occasionally you will get
like your letter it should be crisp and to the thanked for your request and be told that it is
point, a record of your achievements, your being considered and you will only hear the
latest annual report, press cuttings or even outcome if you are successful. Up to half of
a specially produced brochure to the companies you approach will write back
accompany your appeal. depending on the spread of the companies
you approach. Larger companies have a
• Make sure that the letter is addressed to system for dealing with charity mail, and
the correct person at or the correct most will see it as good PR to give a reply.
address. It pays to do this background Smaller companies which are not giving
research. Keep all the information on file as much charitable support will not have the
it will make your job much easier next time. time or the resources to do anything but
scan the mail and throw most of it in the bin.
• If you are successful, remember to say
thank you; this is an elementary courtesy What sort of reply should you expect? If you
which is too often forgotten. If the company do an extensive appeal, you will inevitably
gives you any substantial amount of get a lot of refusals. These will normally be
money, then you should probably try to in the form of a pre-printed or
keep them in touch with the achievements word-processed letter or a postcard.
related to their donation (such as a Occasionally you will get an individually
between the lines. Companies in trying to typed letter of reply. If they say yes, you will
be polite may in brief progress report or get a cheque or a Charities Aid Foundation
copies of your annual report or latest Charities Trust voucher. But more often they
publications). will say no.
• If you do not succeed, go back again next
year (unless they say that it is not their
There may be various reasons given or
The Application Letter – Checklist phrases used by a company for refusing
your request. The company may not mean
• Is it only one side of A4? what it says. Funds may still be available for
• Does it state what your link is with those appeals the company wishes to
the company? support; the company may be able to give
• Does it stress the benefits to the support and just not want to; or it may not
company? want to now or in the future. You should try
• Is it clear why you need the money? to read fact be misleading you if you take
• Is it clear what you are asking for? what they say at face value.
• Is it addressed to the correct contact?
• Is it attractive to the company?
• Is it endorsed?
• Applying to companies
15. excitement and happiness on the face of a child who is told - here is a chance for you to
Think of the educational and cultural value helping them to understand and value others as
- What is the Project?
An outer London Borough with a population of around 27,100 - high-rise flats, terraced
housing. But it is home to the people and families. The people live happily engaging in
professions, activities and interests with a host of skills. Along side this for the young are
some 200+ youth clubs & organisations that make-up the youth service in the Borough.
Trips to a variety of places in and around London, counties and even countries are organised
by different youth organisations - to sight see, bike, camp and so on. We visit these places but
rarely do we have the time, chance or inclination to meet, talk and live in these places for
The hostel currently provides accommodation to enable educational exchange trips to be
complimented in situations where reciprocal visits are not possible because families do not
have the space to accommodate visiting people from other counties and countries. It is
designed and caters for groups of between 12 - 30 people, as distinct from individuals.
Work Involved -- Historically:
Sought assistance from Local Authority Architects to produce conceptual drawing to create
visual concept of what the building would look like once converted.
Negotiated Lease & Building Agreement for 15 years (with option to continue) with the Local
Authority - therefore have the land.
Engaged (at no cost), Architects & Quantity Surveyors to design and cost-out the building
works of existing phase I of the project
Worked with architects and QS to prepare works specifications and tenders. Liaised and work
with final appointed contractors and sub-contractors to complete works.
Worked through processes to expedite Building Regulations approval and Planning
The Phase I initial official opening was so successful that no less then 50 Trusts alone, apart
from another 100+ dignatories attended securing relationships for the future in terms of
support and future funding. Some even offered more help at the time and subsequently
Had a scale model of the building made to exhibit for consultation with youth organisations and
schools in the borough. Also took this model to some presentation meetings with Trusts.
Other promotional and publicity produced to include brochures with list of contacts to arrange
direct exchanges, information on hostelling and graphics/photos. Plus: translated material
languages + in Braille for the blind. Initiated and designed logos to project image of the
Met and subsequently registered with the English/London Tourist Board and British Tourist
16. Authority who included the project in their handbooks translated for a number of countries to
generate interest and future use. This task has successfully underpinned revenue income.
Feedback from youth groups and schools were initially mixed but enough to qualify the project
being forthcoming. Clearly the building would be used - others uncertainties from some
potential users with in-house commitments - later a significant number of these came on board
and participated. Visits made to each group to coordinate.
Secured arrangements with local City airport for groups and have made many visits using the
airport to discuss future arrangements.
During the VE/VJ commemorations earlier this decade, worked in partnership with the
International Duke of Edinburgh’s Award and hosted a group of people from some 14 countries
around the world and an informal dinner for some 150. Co-ordinated arrangements with the
main activities in Hyde Park and arranged trips for visitors. So successful was this venture
that an invitation from the Duke of Edinburgh and Prince Edward to attend a Garden Party at
Buckingham Palace was received and attended.
Thousands of people, representing youth groups from all over Europe, Asia, Africa,
Scandinavia, US, Canada, Australia and latterly the former Eastern block now visited the
Borough putting them and the Organisation clearly on the map - moreover, think of the children
& young people who benefited as a result from the Borough!
• Feasibility Study [So as to be official recognised and accredited] - Grant-aided by CAF.
Made shopping list of items required within the building to furbish, equip and furnish hostel.
Sent this list to an initial host of some 500 manufacturing companies with information about the
project, a brochure and covering appeal letter.
Prepared and submitted grant-aid applications to the Local Authority, Department of the
Environment and a variety of Trusts researched for initial funding required of £250k.
Applications were successful and total monies needed raised. Building also took on needs for
disabled and separate funding secured to provide for this, e.g. wider doors, disabled toilets &
showers, ramp, easier access to phone etc.
Before the decision of this was known a quarter of the manufacturing companies written to had
positively responded pledging a variety of furnishings and goods for the buildings, including
carpet tiles, bunk beds, office equipment, kitchen equipment etc.
Successfully secured sponsorship from the British Council to personally visit the Borough’s
twin-town in Germany to carry out study and to promote the project. This included producing
a brochure translated in German to distribute. Subsequent to approval, received invitation to
be a civic guest of the town by the Oberburgermeister (Lord Mayor). In the early stages we
spent fruitful week visiting hostels and youth groups in and around town.
Secured a scholarship through the Churchill Foundation to extend study to the US and visited
a variety of hostels operated and again promoted project.
Conceived idea of aesthetically improving the external of the building by introducing figurative
murals on the external walls. Engaged an artist to produce concept ideas based on the history
of the Borough. Later secured monies and paints/materials to bring this to reality and some 7
12ft high murals painted based on different historical elements of the Borough - introducing a
new element in terms of companies/organisations who would otherwise not have become
involved and who were interested - plus excellent publicity! This included dealing with all the
processes for further Planning Permission with the Local Authority.
25. and e-mail communications. Secondly, they fundraising using the web and e-mail and
cover relationships with third parties who do not specifically address other new media
provide charities with a wide range of online issues and channels such as digital TV,
services. They are designed to be used by mobile telephones and handheld devices.
all members and affiliates of ICF. The advice here is intended to be general
enough to be useful when considering other
A basic awareness and experience of the media. We have made every effort to avoid
Internet is assumed but otherwise the built-in obsolescence wherever possible.
guidelines are designed both for those new
to using the Internet to fundraise and for We would
those with more experience. encourage
Many of the guidelines will be familiar, since has a query, an issue or an addition to
rules covering data protection, trading, these guidelines to contact the ICF. It is our
contracts and other legal requirements intention to ensure this document is
apply as much to online fundraising as to updated at appropriate intervals, to keep
traditional fundraising. Ethical pace with the inevitable changes in online
considerations are included also but for the fundraising practice.
largest part the guidance is of a practical
nature. FUNDRAISING USING YOUR CHARITY'S
The Internet is a vast
field and, whilst not OnLine handling of personal data
every aspect can be
covered here, in their The capture and
entirety the guidelines handling of
may still appear onerous to some personal data
organisations. Not all of what is contained online can be a
here will apply in every case. sensitive area, particularly when it comes to
The guidance can easily be prioritised into the methods used to capture information on
what is law, what is specifically visitors. Transparency is usually the best
recommended by the ICF and what is policy. The Data Protection Act 1998
understood to be best practice. Charities specifically covers the handling of personal
must balance the information offered here data using the Internet.
with their organisation's overall context and
priorities and form their own judgements. Do not use
Nevertheless, we would caution ICF unencrypted
members and affiliates to pay attention to pages for taking
the fact that managing your credit card payments or donations. Do not
charity's Internet presence use unencrypted e-mail to send or receive
and fundraising is also credit card payments or donations and
about managing your actively discourage people from e-mailing
charity's reputation and their credit/debit card numbers to your
risk. Charities have been charity. State clearly on your Web site, e-
known to mischaracterize mail list or other communication how you
their relationship with a dotcom as will use individuals' personal data e.g. to
philanthropic or to fall into unrealistic mail or e-mail supporters with information
contracts but, as with any contract for related to your charity or other
service, charities should consider all their organisations' sites, products or services to
online agreements carefully and enlist the contact supporters in the event of a
advice and expertise of relevant people necessary communication exchange
where they have any doubts or concerns. requested by you or initiated by your
There can simply be no replacement for charity, such as to confirm or check
due diligence in both the short and the long supporters' donation details to use in
run for any charity embracing the web. aggregate form, that is not personally
identifiable, for analysis to help your charity
Finally, these guidelines focus explicitly on improve its services and products. Ensure
26. that any consent obtained complies with the of propagating chain e-mail letters, virus
Data Protection Act 1998. Explain clearly "warnings", and other inappropriate
how individuals may edit or delete their attachments.
details at any time, or request such
changes. Personal data should either be The more advanced the site, the more
held offline and not on the live Web server chance that all sorts of different
or be held securely behind a firewall or in a copyright works have been used e.g.
non Web-accessible database to prevent photographs, music, film, sound,
unauthorised access. ICF recommends graphic design and animation. Check
that you be as transparent as possible, you have the necessary global
for example in declaring how you intend permission to use any copyright works
to use personal information collected by not created by employees of the charity.
your charity's Web site. Cover how your If your Web site has been designed by
visitors' movements/activities are an agency, get them to warrant that the
tracked (if at all) and whether income is site does not infringe any third party
generated simply by clicking through rights and that you have the necessary
links to commercial participators. licences to use all the software involved
Fundraisers should at no time use or in running the site. Some specialist
encourage unsolicited commercial e-mail software companies will give permission
(spam), where individuals have not given free of charge to charities.
their consent for their details to be released
or used. Fundraisers should understand Check as well that all assets and integral
that currently even the use of legitimate e- components e.g. scripts, used to create
mail lists purchased from third parties can the sites are assigned to you on
cause donor resentment and damage delivery; this should be clearly stated in
public confidence in the sector. the contract. For example, components
could include copy, code, programs,
Acceptable Use Policy images and sound files. However, this
may not be always possible. Some
In using the Internet to fundraise and companies share code across clients,
conduct other activities charities will give and therefore cannot assign the
Internet access to paid staff and volunteers. intellectual property rights to a single
In doing so charities should act to protect client. In these instances, you should
both the organisation and individuals from insist that your charity is given a lifetime
any use or misuse of this access. Charities licence to use the code and develop it
should seek legal advice on establishing 'for non-commercial gain'. It is also
such an Acceptable Use Policy. handy to ask for a detailed style sheet of
the site's design so that you know which
Such a policy could include the following fonts and colours have been used.
You could should not infringe someone
Whether personal use of the Internet is else's intellectual property in other ways
acceptable, and if so at what times. e.g. words used as "metatags" can
Instruction in responsibilities with regard to infringe registered trade marks (so
adhering to copyright and other intellectual ensure that you have permission to use
property legislation. Whether access to them) linking to other sites without
certain Internet resources e.g. pornographic permission could give rise to copyright
Web sites are not permitted from a charity infringement claims. It is good practice
PC/Mac or other access device. Staff to seek such permission. You might
should be expected to monitor and respond also choose to ensure that external sites
to e-mail messages within a set period. linked to on your charity's site should
Compliance with requests to remove e-mail open in a new, separate browser
addresses and other personal data from window, so that you do not alter the
your charity's database. The transmission external site's page layout in any way.
of e-mail that may be deemed harassing,
libellous, defamatory, obscene, threatening, If your Web site includes a chatroom, or
abusive or hateful to recipients. Avoidance noticeboard, guestbook, or archived copies
28. Most companies will charge between 0% One of the difficulties with the Internet is
and 5% of each donation to maintain the that while you could (and should) make
service: 5% is the commercial rate and 2% sure that your Web site complies with all
is the average charity rate. If you receive a relevant UK law, it currently seems an
free service, you might not be entitled to impossible task to ensure a Web site
much support. complies with the laws of every country
from which it could be accessed. However,
See Appendix 1 for a checklist on selecting some countries (and in particular some US
a secure online credit card handling states) are taking active steps to require
supplier in terms of range of services, Web sites accessible by their nationals to
security, handling of fraud, administration be compliant with their local laws.
and reporting. ICF recommends that you
read the contract with your Internet credit Ways to minimise risk include:-
card payment provider carefully. Check to • make clear that your site is only
see where you are required to indemnify or intended for fundraising in the UK
otherwise protect the company against any
• ensure you can react quickly if a
legal action or injury. Consider your rights
problem arises and you need to
and responsibilities, the company's and the
change the content of your site.
customer's. Do not sign anything with which
you are not entirely happy. If in doubt, ask FUNDRAISING USING A THIRD-
the service provider to give you examples PARTY'S INTERNET PRESENCE
of what particular clauses could apply and Practical
ask if any cases have arisen already.
Charities are receiving
Trading - selling goods or services via offers from third-party
the Internet organisations such as
companies and non-
Current legislation prohibits the sale of profits to provide online
charity society lottery tickets via the fundraising services. These include online
Internet. This is because the lotteries shopping malls, cause related marketing
legislation prohibits sale of society lottery programmes, online events management,
tickets "by machine". If you are selling donation handling services and many other
goods via the Internet (for example, you services.
have included your usual catalogue on the
charity's Web site), then you must make To assess the benefits of proposals from
sure you comply with The Consumer such third-party organisations it is worth
Protection (Contracts Concluded by Means considering the following:-
of Distance Communication) Regulations
2000. These came into force on 31st Avoid signing exclusivity agreements as
October 2000. these can limit your charity's options. Is the
organisation's contract flexible enough to
If you are advertising fundraising events run cover your charity's requirements and
by the charity's trading subsidiary (such as concerns? Will the organisation adapt it to
challenge events) or if you are advertising meet your needs? Would you as an
merchandise sold through the trading individual buy in to the proposed service?
subsidiary, you do not necessarily need a Can you work with the staff at the
separate site for the trading company's organisation? With new start-up companies
activities (though there may be VAT without a track record, this can be one of
benefits to doing this). But the relevant the few key elements on which you can
pages should make clear they are activities judge them. Will the site be accessible to
carried out through the trading company. people with disabilities using the Web? Do
The charity should recover from the trading not deny yourself a large market: for
subsidiary a proportion of the costs involved example, 1.7 million people in the UK have
in setting up and servicing the site. serious uncorrectable sight loss. Is the
organisation aware of the Web site
Global issues amendments required to address this issue,
and will they undertake to address them?
29. Promote accessibility of all fundraising shared revenue schemes between the
materials to all Internet users irrespective of organisation and your charity? How long
disability. Ensure reasonable backward will it take the money to reach your bank
compatibility of material with regard to account? Does your charity incur any
browser software and type of hardware. costs e.g. for marketing, bank fees, receipts
This is most easily done by providing a text of acknowledgements to donors? Does
only version of the site. RNIB publishes your charity need to consider acquiring
guidelines at www.rnib.org.uk/access. insurance or indemnities with regard to
Alternatively, sites can be checked using a liability? Consider preparing a response to
free service from CAST at offers and enquiries from Internet
www.cast.org/bobby. fundraising companies. Set out your
fundraising plans and minimum
Conduct due diligence requirements from organisations you are
checks to find out if the prepared to work with. For example, do you
organisation and its business are have ethical trading criteria? What
sustainable. How is it funded? What documents do you expect to see from an
commitments does it owe to its financial organisation? This checklist will help you
backers and shareholders? Is its business assess approaches made. A response to
plan realistic? Seek references from the an approach from an online fundraising
organisation's bank and from other organisation could be: Compare the
participating charities and business proposal with your charity's checklist e.g.
partners where possible. What does the exclusivity, financial data, ethical concerns,
organisation ask of participating charities in your fundraising priorities. Educate them
terms of marketing? Is the marketing and request that they submit a proposal
planned by the organisation realistic and specifically for you. Evaluate the proposal
sustainable? Avoid organisations that and decide on the options available. If you
expect charities to conduct all the marketing decide to continue, perform due diligence
activity on their behalf. Can the organisation and sign a contract that reflects your
provide you with statistical reports on the charity's requirements. ICF recommends
number and quality of visitors generated by that you take care not to confuse offers and
its marketing? How will you allow your arrangements with dotcoms or commercial
charity's name and brand to be used by the services providers as philanthropic
organisation in its efforts at audience initiatives. Avoid services where the
acquisition? company cannot offer you some evidence
of its sustainability and audience potential.
Is there a limit on the These things can be more time-consuming
number of charities or and wasteful than they appear at first!
the number per market sector? On some
sites this will increase income for Contracts
participating charities, on others it will limit Contracts can be time-
it. Does the organisation's site take other consuming and difficult to
forms of online payment in addition to credit understand. The Internet arena is no
cards e.g. direct debit payments from bank exception. All the more reason to exercise
accounts? This could expand the number of due diligence and consult with others to
supporters likely to make an online ensure that you are comfortable with what
transaction at the site. Have they taken into you are signing up to and that you are
account tax efficiency issues and are they being treated fairly.
able to offer online tax reclamation of any
donations? What is unique about the ICF recommends that you show any
organisation's offer? Why should your agreement to your charity's compliance
charity work with them and not similar officer, financial director, legal firm or
online fundraising companies? With regard insurance company before signing.
to trading Web sites, does the organisation Consider drawing up your own contract
offer a customer charter covering issues or seek amendments to the standard
such as their delivery commitments and contract offered by the organisation.
their returns and/or refund policy? Is this
acceptable? What is the revenue split in Avoid signing
30. Non Disclosure Agreements. Consider • How are you compensated if they
offering written confirmation that all are not met?
conversations, whilst active, are • How important is your organisation
commercial and in confidence and will not to the supplier? If your business
be shared. Contracts with online fundraising accounts for less than 0.1% of the
organisations may need to comply with the supplier's turnover, you are unlikely
Charities Act 1992 and its definitions of to receive a premium service so you
"commercial participator" or "professional might do better with a smaller
fundraiser". In these cases, the obligations supplier.
to make statements and have agreements
covering minimum terms will apply. Some relevant legislation
Be clear - Computer Misuse Act 1990
what your - Data Protection Act 1998
charity's Copyright Designs and Patents Act
could be should anything go wrong. A Consumer Protection (Contracts
formal agreement should specify the Concluded by Means of Distance
degree of liability which the Internet-based Communication)
service provider assumes to the donor, the Regulations 2000
charity and third parties for information, Broadcasting Act 1990
transaction handling and losses related to Contempt of Court Act 1981
the Internet-based service provider's Universal Copyright Convention,
administration of a donation. Consider Geneva 1952
financial losses and brand reputation. Berne Convention for the Protection
Include a termination clause in the Service of Literary and Artistic Works, Berne
Level Agreement, such that the contract 1886
can be terminated if customers are not
receiving a sufficiently high quality of Useful resources
service. Immediate termination should
come into place if the partner brings the http://embark.to/fundraisingatgowenco
charity's name into disrepute, and income - Messrs G Owen & Co (e-Mail:
from existing customers should still be email@example.com)
protected even though the active
agreement fails. Contracts should specify www.computeruser.com/resources/dictionar
explicitly data ownership, not only of y/
standard personal data but also of related - High-Tech Dictionary from Computer
data e.g. tracking of individuals' User
preferences and movements throughout a
site via "cookies" and other methods. www.cafonline.org
Contracts regarding licensing or syndicating - Charities Aid Foundation (tel. 01732
content should include delineating 520 000)
responsibility for a charity's content on an
external/third-party site. In certain cases, www.charitycommission.gov.uk
service level agreements should be - Charity Commission for England and
established. These should make clear Wales
issues such as:- (tel. 0870 333 0123)
• Will you have a dedicated account - Data Protection guidance tel. (01625
• If yes, how many other accounts
does he/she manage? www.fundraising.co.uk
• Can you speak directly to the - UK Fundraising (tel. 020 8640 5233)
technical support team?
• What levels of service are www.horwathcw.com
guaranteed? - Horwath Consulting (tel. 020 7583
31. 1577) www.freeserve.com
- Web Site ISP
- RNIB's advice on accessibility in www.hotwired.lycos.com/webmonkey/design
publishing (tel. 0845 766 9999) - Graphics & Web Tutorials
- Scottish Council for Voluntary www.tucows.com/
Organisations - Graphics & Web Tutorials
(tel. 0131 313 2488)
- help in constructing an online policy - Gifbuilder – Web Animation
- possible fundraising frauds/scams tag=st.dl.10215.upd.10215-108-19334
- Graphics & Web assistance
- fundraising www.stud.fh-
www.justgiving.com - Graphics & Web assistance
- Government sponsored fundraising
- fundraising site
- All about Gift Aid
- Donating via the Web Choosing a secure online credit card
- Buying gift vouchers for family/friend The level of service, security and customer
- % goes to charity care offered by online credit/debit card
processors varies dramatically. When
www.inlandrevenue.gov.uk/payrollgiving choosing an online credit card processor, it
- Tax concessions on giving via the would be advisable to ask the following
www.premiumserve.com/donations Range of services
- Donating via the Web 1. Do they process both credit and
debit cards, including Switch cards?
www.charitiesdirect.com It is advisable to go with a supplier
- Donating via the Web that processes both.
2. Can they process donations of any
www.charitasdata.co.uk amount? Or is there a minimum
- Details about charities & donors amount? It's advisable to go with a
company that offers a zero floor limit.
www.angal.co.uk Does the usage charge increase for
- Fundraising collection boxes small payments?
www.funderfinder.org.uk 3. Do they process in multiple
- fundraising database currencies? If you choose to process
only pounds (you are charged for
32. each additional currency), this does Can a maximum number of failed
not mean that people using foreign attempts to make a donation with
credit cards won't be able to donate, one credit card be set?
it just means that all donations will
be made in pound amounts and the Can a maximum number of
donor will have to do the maths. Do successful donations made with one
they charge extra for processing credit card be set?
Can a maximum number of failed
4. Can they process tax attempts to make a donation from
efficient donations e.g. one IP address, which details the
Gift Aid donations? location of a specific computer, be
Very few online credit set?
systems are designed with charities Is the donor's e-mail address
in mind - it is advisable to ensure validated before the credit card is
that the company you chose can authorised?
meet your special requirements.
5. Do they offer paperless direct debit?
Very few online credit card 1. Credit card fraud is a major problem
processors currently do. This may on the Internet. Fraudsters typically
also have a very high set-up and obtain credit from lists of stolen
running cost. cards published on the Internet, or
by using illicit programmes to
6. Can they process transactions where produce lists of algorithmically
donors have come straight into the allowable card numbers. Fraudsters
donation page from an use charity sites to test stolen credit
affiliated web site (this card numbers, because they don't
can cause security have to go through the lengthy
issues, so needs to be process of purchasing a product.
carefully handled). Once they've used you to authorise
a card, they'll abuse it on other sites.
2. It is currently against the Data
1. Do they process credit card Protection Act in the UK and
payments for gambling or Germany to capture and cross-
pornography web sites? The majority reference someone's postal address
of online fraud occurs in these areas with his or her credit card number on
and charities may choose to avoid the Internet. As a result the billing
online credit card processors that are address of credit cards used online
involved in these industries. are not verified by the online credit
card processing company. Because
2. When credit card payments are this law has made online fraud in the
processed, what kind of security is in UK and Germany easy, the credit
operation? card companies, banks and UK
Is online live authorisation of cards government are currently re-
(involving no storage of details) sent evaluating the law. It may be
over a Secure Sockets Layer- revoked in April 2002. In the mean
encrypted (secure) link? Are all time, if you plan to ship goods to
card details inputted on their site someone who has purchased them
sent through both offline (expiry date via your Web site, you should always
and hot/stolen card server) and on- verify that the address provided is
line (hot/stolen card server, sufficient the billing address associated with
funds, authorisation) to prevent use the credit card.
of stolen or lost cards on their site?
3. When should you be suspicious that
33. a donation could be fraudulent? credit card numbers to purchase
products or make donations to your
The same credit card number is organisation, can the online credit
being used from different countries. card processor implement what is
known as a deferred payment
The same e-mail address is being system? Deferred payment systems
used in conjunction with different ring fence funds that have been
credit card numbers. donated on the individual's credit
card -- but do not actually debit the
The same postal address is being card for five days. During this time
used in conjunction with different the charity can decide whether it
credit card numbers. thinks the donation is fraudulent or
not. If the charity thinks the donation
Many donations are made in rapid is fraudulent, it can un-ring fence the
succession from the same IP funds. If it thinks it is genuine, it can
address (an IP address details the debit the card. However, fundraisers
location of a specific computer). should be aware that this procedure
could add significantly to the
The donation is very small (£1
donations should be carefully
examined). Although online credit card
processing companies are not liable
A free web-based e-mail address is
for credit card fraud, it would be
used, such as Hotmail. Many are
advisable to ensure that your
legitimate, but when combined with
contract with them states that they
any of the above the donation should
will do everything in their power to
be very carefully examined.
limit fraud and to co-operate with
The e-mail address does not match your bank and international police to
the IP address of the machine the track down fraudsters, once they
donation was made from. have been identified.
4. If credit card fraud occurs, what can 5. If credit card fraud occurs, what
your online credit card processing should you do to stop it?
company do to stop it? Can they:-
Report the stolen card numbers to
Block the fraudster's IP address? your bank.
Remember that the computer could
Reimburse the cards that have
be located in an Internet cafe, or
been fraudulently used.
large organisation such as AOL or
FreeServe, where many computers
Ask your online credit card
can appear to have the same IP
processing company to block the
address. Block the fraudster's e-
fraudsters' e-mail and IP
mail address? Most fraudsters’ use
free, Web based e-mail such as
Hotmail -- some online credit card
Implement a deferred payment
processors will send you a warning
system if the fraud continues
when a donation has been made by
somebody using this kind of e-mail
Implement an intelligent software What kind of online administrative systems
system that develops a profile of are provided?
typical donor behavioural patterns
and warns you if a donor's behaviour Can you edit the layout and content of your
varies from this norm? secure payment pages via the Internet?
Can you use this system to launch one or
If fraudsters continued to use stolen more new appeals in a matter of minutes?
34. How many appeals can you run donors?
simultaneously? - IP address? Resolved IP address?
Can they be different e.g. one-off - How are the donation reports
donations, prompted levels of giving, direct formatted? It is advisable to ensure
debit/regular gifts? that the online credit card processing
If you are a membership organisation, how company can supply you with reports
many membership ID numbers can they in a format that is compatible with
provide you with? your internal donor database so that
Can you view reports about the number, every record doesn't have to be
quantity, and origin (donor details) of keyed in by hand.
donations online at your convenience?
Can you reimburse credit cards that have
been fraudulently debited via the online Glossary
Can you reimburse credit / debit cards for Encryption: a method of encoding
other reasons, not only due to fraudulent sensitive data, such as donor records and
use? credit card numbers, so that it might be
Can you utilise the deferred payment stored or transmitted safely.
system online to un-ring-fence or claim
Extranet: a private or restricted access
computer network usually operated by an
What kind of security at your charity and at
organisation. Unlike an intranet, an extranet
the payment service provider is used to
is made accessible to other relevant
ensure that only authorised personnel have
organisations or individuals such as
access to the above systems? Passwords?
suppliers as well as to the organisation's
Certificates (digital)? Certain IP addresses
Internet Protocol: a standard method of
naming and identifying a particular
computer connected to the Internet using a
- What kind of confirmation does a
unique series of numbers. The shorthand
donor receive after having made a
"IP" is more common.
Intranet: a private restricted access
- An e-mail sent instantly by the credit
computer network usually operated by an
card processing system?
organisation. Information is stored and
- Can this e-mail be customised or
retrieved in the same method as the
Internet but access is restricted usually to
- Can your charity do this over the
- Is there a charge for this?
IP: see Internet Protocol.
- How long does the change take to
Meta tags: "hidden" information within a
- Can different e-mails be sent to
Web page that describes the content and
other qualities of that Web page. The
information does not appear when the Web
How do they report back to you about
page is viewed, but is used by search
engines to interpret further the text content
of Web pages.
- Is an e-mail sent to you every time a
donation is made?
Offline: not connected to the Internet or
- Is a daily report e-mailed to you
other computer network.
about all the donations that have
been made that day?
Online: connected to the Internet or other
- Is a monthly report e-mailed to you
about all the donations have been
made that month?
Secure server: a server that features
- What information is provided about
36. FUNDRAISING - FINANCIAL
1. REPORTING TO FUNDERS
(1) Find out what they want:
(b) Regular reports and returns
(c) Annual Project accounts
(d) Parent Body accounts
(2) Does the funder understand the relationship between the individual Project and Parent Body.
It is essential that the application is based on fact land reality and not on "last year's application plus
a built-in element for contingencies.
This is not only to ensure that the figures and costings are reasonable and based on up-to-date
information, but also to ensure a consistency in the various figures supplied to the funder. Any
variances between the application and the accounts supplied ma, at best result in a query, and at
worst result in a withholding of funds.
(1) Is the expenditure in the correct cost centre?
(2) Is the income in the correct cost centre?
3. PROJECT ACCOUNTS/REPORTS
(1) How much detail does the funder require?
(2) Are all our expenditure headings acceptable? For example, are your on-costs, (e.g. audit fee),
chares to be included or re-categorised.
(3) Are annual accounts sufficient or do we need to provide quarterly accounts?
(4) Is the funder's financial year different to Project/Parent Body and do we have to adhere to this
rather then our own
(5) What is the funder's timescale for reporting?
(6) Are separate salary details required, if applicable.
(7) Does' the funder require the individual Project accounts to be separately audited or will they be
satisfied with an "extract from the audited accounts".
A separate audit certificate for a project can be arranged during our normal audit in June, but at an
38. VAT & TAX MATTERS
These notes are intended as an "aide-memoir" for some of the various tax and VAT problems you
may encounter. This list is not comprehensive and there may be further points which need to be
added. Nor is it intended to give you the answers which would take a lot of paper; it is intended to
alert you to potential problems so that you can then seek further advice from a qualified person, e.g.
Accountant where appropriate. This is given as a guide only and no responsibility will be taken by
the publisher for any inaccuracies and consequences arising out of the information below. All
matters relating to VAT should be discussed and verified with the local H M Customs & Excise VAT
Office before acting, unless otherwise professionally advised. Similarly, matters relating to other
Taxation should be referred to the Inland Revenue office at Bootle, unless again advised otherwise
by a professionally qualified person or business.
Is it a donation, a contract or sponsorship?
Straight gift with no strings (i.e. the Project/Parent Body is providing NOTHING in return) no tax or
Could it be made more effective?
(a) Consider Gift Aid or Deposited Covenant for 'one-off’ gifts
(b) Deed of Covenant for regular gifts
Is the Project/Parent Body providing a service or something in return for the funding? If so, it will
undoubtedly be subject to VAT. This need not always be a problem if the funder/sponsor is made
aware at the start.
e.g: £1,000 + VAT means the funder will have to pay £1,175 (£175 of which they may be able to
reclaim) but £1,000 VAT inclusive means you only end up with about £851. BUT there are a few
exceptions e.g. the provision of "care".
Always prepare a written contract which should include the following:
(a) The cost or fee should always be "subject to VAT where applicable".
(b) Payment terms (and interest?)
(c) Financial Reporting requirements.
39. (iii) Sponsorship
Is the Project/Parent Body providing the funder with publicity? If so this will probably constitute
sponsorship. The inclusion of a funder's logo on printed matter etc will always constitute
sponsorship. Sponsorship is VATable. As this is in effect a "contract there should be a written
contract as in (ii) above.
2. DONATIONS IN KIND
Donations in kind, (e.g. secondees or studio facilities), could fall into any of the above so make sure
that you AND the funder/sponsor are clear which it is. Just because no cash changes hands
doesn't mean there are no VAT implications.
3. TRAINING COURSES AND CONFERENCES
The provision, otherwise than for profit, if:
(a) Education or research of a kind provided by a school or university; or
(b) training or re-training for any trade, profession or employment is exempt from VAT.
This is not necessarily to our advantage - [see 6 below ].
4. TAX RELIEF ON VOCATIONAL TRAINING
Where, for example NVQ training is provided to individuals they can be charged the 'net of tax' price.
e.g. if the cost of a course was £100, the Project/Parent Body would only charge the person £75 and
we would reclaim the other £25 from the Inland Revenue.
5. SALE OF GOODS
VAT is chargeable on all sales of goods (e.g. tapes, vans, computers) with a very few exceptions
(e.g. books, cars).
6. VAT is not necessarily all BAD news.
Do not be afraid to charge VAT - provided it does not jeopardise your funding - it increases the
amount of VAT that can be reclaim, if registered for VAT.
It shouldn't be a problem for the funders if they are able to reclaim the VAT we charge, and most of
7. GENERAL VAT RULE FOR INCOME
Generally, the nature of the goods or services supplied determines whether or not a transaction is
VATable and not the status of the supplier or 'customer'.
8. CHARITY TRADING
Does what you are proposing to do fall within ~'s charitable objectives? (Is it primary purpose?)
Trading profits could be taxable (and the Charity Commission might object).
9. NOTES FOR COMPLETING THE VAT CERTIFICATE DOMESTIC USE
43. it over separately to the Inland Revenue.
3.3.3 If the individual paid tax at the higher rate, he or she could get relief on the payment on the
difference between the basic and higher rate on the grossed-up amount.
A company deducted the gross amount of the payment as a charge in its corporation tax
3.3.4 Charities receiving covenanted payments could reclaim basic rate tax on the payments made,
provided the covenant was legally valid, lasted for over three years and a clear audit trail could be
demonstrated linking the payment to the donor.
3.3.5 There was no statutory limit on the benefits which could be received in relation to payments
made to a charity under a Deed of Covenant. However, for payments of £100 made under a Deed to
a membership charity, benefits up to 25% of the net amount of the payments were ignored for tax
SECTION B: GIFT AID FOR INDIVIDUALS FROM APRIL 2000
3.4.1 The Gift Aid scheme was amended by Finance Act 2000 for donations made by individuals on
or after 6 April 2000. The main changes were to:
* abolish the £250 minimum limit for Gift Aid donations, so that the scheme applies to any
donation, whether large or small, regular or one-off
* withdraw the separate tax relief for payments made under a Deed of Covenant and give all relief
for such payments under the Gift Aid scheme
* replace the requirement for donors to give the charity a Gift Aid certificate with a requirement to
give a new, simpler and more flexible Gift Aid declaration
* allow donors to give a written Gift Aid declaration by post, by fax or by internet or an oral
declaration over the phone or face to face.
* Crown servants and members of the UK armed services serving overseas, and
• other non-UK-resident individuals who make donations out of income or gains charged to UK tax,
to use the new Gift Aid scheme.
3.5 Commencement date
3.5.1 In the case of donations by individuals, the new Gift Aid measures apply to:
* covenanted payments falling due on or after 6 April 2000, and
• all other donations made on or after 6 April 2000.
3.5.2 Where a covenanted payment due before 6 April 2000 was made on or after that date:
44. * the Gift Aid scheme will not apply to the payment
* the existing rules for Deeds of Covenant will continue to apply to the payment.
In particular, the rule entitling the charity to reclaim tax at the basic rate in force when the
covenanted payment falls due, rather than when it is made, will continue to apply to the payment.
Mr MacDonald made a Deed of Covenant in favour of his local church, promising to pay £5 a week
by until 31 December 2000. Mr MacDonald was unable to attend church on Sunday 2 April 2000,
but paid £10 on Sunday 9 April 2000. The £5 due on 2 April 2000 will come under the Deed of
Covenant scheme, and tax can be reclaimed at the basic rate of 23% (the tax rate in force when the
payment was due). The £5 due on 9 April 2000 will come within the Gift Aid scheme (as will future
payments under the Deed). Tax can be reclaimed at the basic rate of 22% in relation to this amount.
3.6 Abolition of the £250 minimum limit
3.6.1 From 6 April 2000, the £250 minimum limit for Gift Aid donations was abolished. From that
date the charity can reclaim tax on any donations made by individuals, whether large or small,
regular or one-off - provided the other conditions for the tax relief are satisfied. In particular, the
charity will still have to be able to show an audit trail (see section 3.36 below) from the donation to a
donor who has given a Gift Aid declaration which covers that donation. For Gift Aid declarations, see
section 3.10 below.
3.6.2 Each charity will need to decide, from its own circumstances, whether it wishes to reclaim on
small Gift Aid donations. For some charities it may not be cost effective to claim on donations below
a certain threshold. For a small charity that can call on plenty of volunteers, it may be cost effective
to claim on all Gift Aid donations. Whether a charity makes a claim on a Gift Aid donation or not, it is
still possible for the donor to claim higher rate relief on the gross amount of the donation, provided
he or she has completed a Gift Aid declaration and met the other conditions of the scheme.
A donor who pays higher rate tax makes a Gift Aid donation on 30 June 2000 of £3 to a charity to
which he has made a declaration. The charity has a policy of not claiming on donations below a
threshold of £5, because it is not cost effective to do so. It therefore does not claim back the tax of
£0.85 on the donation (£3 X 22/78).
The donor, however, can include the donation of £3 amongst any other donations on her tax return.
Higher rate relief of £0.70 (£3.85 X 18%) will be due.
3.7 Who can make a Gift Aid declaration?
3.7.1 Before 6 April 2000, only donations by UK-resident individuals could qualify as Gift Aid
donations. From April 2000, the following will qualify:
* donations by individuals who are resident in the UK
45. * donations by individuals who are Crown servants or members of the UK armed forces serving
• donations by other non-resident individuals, provided they have income or capital gains charged
to UK tax at least equal to the gross amount of the donation (i.e. the donation before deduction of
basic rate income tax).
3.8 Methods of donation
3.8.1 Donors must donate their own money. The donation can be made by cash, cheque, direct
debit, credit card, debit card, postal order or standing order. `Telegraphic transfer' is also acceptable.
Donations can be made in sterling or any foreign currency. When calculating claims the charity must
convert foreign currency into sterling at the rate on the date when the donation was made.
3.8.2 Donations by cheque are only valid pending clearance of the cheque. If the cheque is not
honoured a donation has not been made.
3.8.3 A donation must be a payment of a sum of money. A donation cannot be made in kind, by loan
waiver or by debt/loan conversion.
3.8.4 Subject to the benefits rules outlined below in Section D, outright payments to a charity in
return for services, rights or goods are not gifts to charity and so are not eligible for Gift Aid tax relief.
For example, the following cannot come within the Gift Aid scheme:
* of school fees for a specific person
* to purchase books, jumble sale items, food etc
* for admission to events (jumble sales, concerts etc)
* for raffle or lottery tickets (including 100 clubs etc). The payment to purchase a raffle ticket from a
charity is not a gift to that charity but a payment for the right to enter the raffle. It is immaterial
that the chance or expectation of winning a prize is small or that the value of the prize maybe
A charity must not make claims under the Gift Aid scheme in respect of payments which have
already received tax relief. This includes payments received in the form of charity voucher or from a
Payroll Giving Agency in respect of payments made under the Payroll Giving scheme.
Charities also should bear in mind that charity vouchers cannot themselves be used to purchase
services, rights or goods, examples of which are shown above.
3.9 Tax to cover
3.9.1 From 6 April 2000, donors no longer need to pay income tax at the basic rate equal to the tax
reclaimed by the charity on their donations. Instead, donors have to pay an amount of income tax
and/or capital gains tax, whether at the basic rate or some other rate, equal to the tax deducted from
their donations. This means that donors who previously may have paid tax at a marginal rate
between the lower and basic rates of tax (and therefore had not paid enough tax at the basic rate to
cover the tax reclaimed by the charity) will no longer have additional tax to pay.
46. 3.9.2 Even though a donor cannot receive payment of non-payable tax credits on dividends paid by
UK companies, those credits can be used by the donor to cover the tax reclaimed by the charity on
the donation. Tax deducted from bank and building society interest etc., and not repaid, can also be
used to cover the tax reclaimed by the charity.
3.9.3 Prior to 6 April 2000 donors could only claim higher rate tax relief for their donations against
income tax they paid. From 6 April 2000 donors will be able to claim higher rate tax relief for their
donations against both income tax and/or capital gains tax.
3.9.4 The position of a taxpayer making Gift Aid donations can change from one tax year to the next.
Charities are recommended to remind donors on a regular basis of the need for them to have paid
sufficient income and/or capital gains tax on their donations. It need not be done in a separate letter
to each donor, but could be included in any material sent to supporters (a newsletter, for example).
3.10 Gift Aid declarations: introduction
3.10.1 From 6 April 2000, Gift Aid certificates were replaced by new, simpler and more flexible Gift
Aid declarations. Before a charity can reclaim tax on a donation by an individual, it must have
received a Gift Aid declaration from the donor containing certain information and confirming that the
donation is to be treated as a Gift Aid donation. Without this declaration, a donation from an
individual will not qualify under the scheme.
3.10.2 Donors will be able to give the charity a declaration:
* in advance of their donation, at the time of their donation, or at any time after their donation
(subject to the normal time limit within which tax can be reclaimed - normally around six years)
* to cover a single donation or any number of donations
* in writing (e.g. by post, by fax or electronically through the Internet) or orally (e.g. over the phone
or face to face).
3.10.3 The amount of information required by law on a Gift Aid declaration has been kept to the
minimum consistent with proper administration of the tax relief and the need for the charity to be
able to show an audit trail. Charities may well wish to add further information and notes of their own
on their declaration forms. It may also be necessary for the charity to add further information to
satisfy other legal requirements. For example:
* if the charity plans to use the information provided by the donor for any use other than reclaiming
tax, the Data Protection Act 1998 requires you to explain this
* if a registered charity in England and Wales incorporates the Gift Aid declaration in appeals
literature, the Charities Act 1993 requires a charity to include a statement that it is a registered
charity. Under Scots law, Scottish charities are required to include a statement that they are
3.10.4 The Inland Revenue has no objection to charities incorporating declarations into other
documents, such as standing order mandates or Deeds of Covenant. These documents may contain
more than the minimum requirements laid down in the legislation.
47. 3.10.5 Charities will need to design their own Gift Aid declarations. There is no official form produced
and available from the Inland Revenue (but see paragraph 3.10.6 below). Charities should ensure
that the declarations satisfy all the requirements set out in the paragraphs below and any other legal
requirements under the Data Protection Act, the Charities Act, etc. There is no need to get the
Inland Revenue's approval for own-design declarations, but IR Charities will be happy to review
declarations if a charity wants. If a charity or fund-raiser wants the Inland Revenue to comment on a
declaration, they should contact:
For charities in England, Wales and Northern Ireland
Inland Revenue Charities
St John's House • Merton Road
BOOTLE • Merseyside • L69 9BB
Telephone: 0151 472 6035 • Fax. 0151 472 6268
For charities in Scotland
Inland Revenue Charities
15, Drumsheugh Gardens
Telephone: 0131 777 4040
Fax. 0131 777 4045
3.10.6 Appendix B1 to these Guidance Notes contains an Inland Revenue model declaration form,
which you can use or adapt if you wish. The model declaration contains some notes over and above
the minimum requirement. You do not have to include all of these notes in your own-design
declaration form. Those notes in bold type must be included if the declaration form is to be valid.
3.11 What a Gift Aid declaration must contain
3.11.1 All Gift Aid declarations must contain:
* the donor's name
* the donor's home address
* the charity's name
* a description of the donations to which the declaration relates
* a declaration that the donations are to be treated as Gift Aid donations
and, except in the case of a declaration given orally:
* a note explaining the requirement that the donor must pay an amount of income tax and/or
capital gains tax equal to the tax deducted from his or her donations.
3.11.2 There is no statutory requirement for a declaration to be signed and dated.
48. 3.11.3 A date is needed on the declaration only where it serves to identify that a particular donation
or donations are to come within the scheme. For example, if the declaration stated that `all
donations I make from today" were to be Gift Aid donations, clearly a date would be required. A date
would not be required, however, where the declaration stated, for example, `all donations I make to
the charity from 6 April 2000'.
3.11.4 In the case of a written declaration, the charity may wish to pre-print most of the information
on the declaration form. For example, the charity's name might be pre-printed. Charities need to
bear in mind, however, that a donor might later wish to deny that he or she made a declaration. If
there is no part on a written declaration completed by the donor, the charity will find it difficult to
prove that the declaration was genuine.
The donor's name and home address
3.11.5 In order to ensure that the charity can establish an audit trail to the donor from a donation, the
charity should get as full details of the donor's name and home address as possible. In the event
that IR Charities audits the tax reclaim and the information held is insufficient to enable the auditor to
trace the donor, the charity may have to get further information to show that the tax reclaim is
correct. If the charity cannot get the further information, it is likely that the declaration will be
3.11.6 Ideally, the charity should obtain the donor's full name. At the very least it should get his or
her initials and surname. And it should also get the full postal address, including, in particular, the
3.11.7 If a donor subsequently changes his or her name or address, this will not invalidate the
declaration. If the charity is notified of a change in the donor's name or address, it must keep a
record of the updated information. The declaration itself does not need to be amended, but a record
of the change should be kept on the charity's database.
The charity's name
3.11.8 The charity's full name, usual name or acronym will suffice, provided it is adequate to identify
3.11.9 Declarations can include the name of more than one charity - for example, where a joint fund-
raising event takes place. In such a situation charities need to ensure that:
* the donor is aware how his or her donation is to be split between the charities listed on the
* the charities keep records to show how the donations have been divided between them. Both
charities will need to be able to produce a copy of the declaration, if required.
Description of the donations to which a declaration relates
3.11.10 Any appropriate description can be used. For example:
49. * "the donation of £x I made to you on dd/mm/yy", or
* "the enclosed donation", or
* "all donations I make under the direct debit mandate below", or
* "all donations I make on or after the date of this declaration", or
* "all donations I make from this date until further notice", or
* "all donations I have made since 6 April 2000 and all donations I make hereafter".
3.11.11 Whether the charity chooses from one or more of the above descriptions or devises its own,
it is important to get the description right. The declaration will not cover any donations received that
fall outside the description used.
3.11.12 Depending on the description used, a declaration may apply indefinitely to future donations.
There is no requirement for such declarations to be renewed periodically, but see paragraph 3.9.4
above about reminding donors concerning tax to cover.
3.11.13 If a donor wishes to alter the description of the donations to which a declaration relates, they
should cancel the declaration and make a fresh one. Declarations do not need to be cancelled
when, for example, the donor changes his or her address.
Declaration that donations are to be treated as Gift Aid donations
3.11.14 Again the charity can devise appropriate wording. For example:
* "Please treat my donations as Gift Aid donations", or
* "I want my donations to be Gift Aid donations", or
* "Please reclaim tax on my donations", or
* "I want the charity to reclaim tax on my donations", or
* "I want the charity to reclaim tax on my donations Yes/No (delete as appropriate)", or
• "Tick here if you want us to reclaim tax on your donations [ ]".
Note explaining the tax requirement
3.11.15 Again the charity can devise appropriate wording. For example:
* "You must pay an amount of income tax and/or capital gains tax equal to the tax we reclaim on
your donations", or
• "Remember to notify us if you no longer pay an amount of income tax and/or capital gains tax
equal to the tax we reclaim on your donations".
3.12 Written declarations
3.12.1 Written declarations include declarations made on paper or electronically. The former can be
handed, posted or faxed to the charity by the donor, and the latter can be made online via the
3.13 Oral declarations
3.13.1 In the case of an oral declaration, the person taking the declaration on behalf of the charity
50. might recite information already held by the charity to the donor and ask him or her to confirm it,
rather than asking the donor to recite the information him/herself.
3.13.2 If a charity receives an oral declaration it must send the donor a written record of the
* all the details provided by the donor in his or her oral declaration
* a note explaining the requirement that the donor must pay an amount of income tax and/or
capital gains tax equal to the tax deducted from his or her donations
* a note explaining the donor's entitlement to cancel the declaration retrospectively within 30 days
(see paragraph 3.14.3 below)
* the date on which the donor gave the charity the declaration, and
* the date on which the charity sent the written record to the donor.
3.13.3 An oral declaration will not be effective unless and until the charity or its representative sends
the donor the written record of the declaration. The charity cannot reclaim tax in respect of a
donation covered by an oral declaration until it has sent the written record. Once the written record
has been sent, the charity can reclaim tax in respect of any donations covered by the declaration,
even if they were received before the written record was sent. If the oral declaration is cancelled
within the 30-day period, however, any reclaimed tax will have to be repaid to the Inland Revenue
(see paragraph 3.14.3 below).
3.13.4 The written record of the declaration does not have to be recorded on paper. For example,
the charity's representative might record the details on a computer, with an electronic copy being e-
mailed to the donor, or a hard copy sent by post. If the charity uses an electronic means of recording
the donor's information, it will need to demonstrate to IR Charities at an audit that the electronic
recording of the information generates a written record sent to the donor.
3.14 Cancellation of written and oral declarations
3.14.1 Donors are entitled to cancel their declaration at any time. They may do so by notifying the
charity in any form of communication. The charity should keep a record of the cancellation of a
declaration, including the date of the donor's notification.
3.14.2 Subject to paragraph 3.14.3 below, cancellation of a declaration has effect only in relation to
donations received by the charity on or after:
* the date on which the donor notifies the charity of the cancellation, or
* such later date as the donor may specify in the cancellation.
The charity must not reclaim tax in respect of such donations. However, any donations received
before the date of the donor's notification will still qualify as Gift Aid donations.
3.14.3 If a donor who has given the charity an oral declaration cancels it within the period of 30 days
after being sent the written record, the cancellation will have retrospective effect, so that it will be as
if the declaration had never been made.
3.15 Particular types of declaration
51. Joint declarations by spouses etc.
3.15.1 It is possible for spouses and persons living together to make a joint declaration on the same
form. The joint declaration must include the full names and address of both. Both parties will need to
make clear to the charity from whom each donation originates, or how a joint donation is to be split
for purposes of the charity's records. Likewise, the donors will need to record similar details for
purposes of their own tax affairs. The charity will need to list each person and their part of the
donation separately on the R68 (Gift Aid) schedule form accompanying the claim.
3.15.2 In England, Wales and Northern Ireland a business partnership does not have legal
personality. So, a donation by a partnership is treated as made by the underlying partners. One
partner may make a Gift Aid declaration on behalf of all the partners, provided he or she has the
power to do so under the terms of the partnership agreement or some other instrument given under
seal. In that case it will be sufficient for the declaration to show the name and address of the
partnership. Otherwise, it will be necessary for each partner to make their own Gift Aid declaration.
They may do so on the same declaration form, provided it lists all their names and addresses.
3.15.3 In Scotland, a partnership has legal personality. So, in all cases, one of the partners may
make a Gift Aid declaration on behalf of the partnership, showing the name and address of the
3.15.4 The partners should enter their share of the donation on their own Self-Assessment return.
How the donation is apportioned between the partners is a matter for them to decide, but, unless
there is evidence to the contrary, it will be assumed to be in accordance with their share of the
Declarations linked to sponsored events
3.15.5 The money raised from a sponsored event does not belong to the individual who has been
sponsored and is not his or hers to give as a Gift Aid payment. However, it is possible for the
individual amount raised from each sponsor to count as a Gift Aid donation from that sponsor.
3.15.6 The person being sponsored may ask the sponsors to make a separate declaration to the
charity for which he or she is raising the money - this is likely to be on a one-off donation type of
declaration supplied to the participant by the charity.
3.15.7 Alternatively, it is possible for charities to design a sponsorship form that can also be used as
a joint declaration form. The suggested format is for the declaration to be placed at the head of each
sheet, with each sponsor being able to opt to have his or her sponsorship money paid to the charity
as a Gift Aid donation by, for example, ticking a box. The recommended method is to have the
following boxes below the declaration for each sponsor to complete:
* Sponsor's full name
* Home address, including post code
* Amount pledged
* Amount collected
52. * Date collected
* Tick box to have amount treated as a Gift Aid donation.
The date when the sums collected were handed over to the charity should also be entered on the
form. A copy of a model Gift Aid sponsored event form can be found at Appendix B2.
3.15.8 The details outlined in the first three bullets above would be collected from the sponsors by
the participant prior to the event, with the other details being entered on the form when the money is
3.15.9 The participant will need to ensure, if the money collected is banked in his/her own account
before a cheque is sent to the charity, that the sum on the cheque matches the amount collected on
the sponsorship forms so that the charity is provided with a clear audit trail.
3.15.10 The charity can use a declaration/sponsorship form that has been approved by IR Charities
as a substitute for the R68 (New Gift Aid) schedule that accompanies the claim (on which, see
Section 6.4). The original should be retained by the charity and a copy sent with the repayment
claim. It is recommended that claims made for this type of donation be made on a separate R68 tax
claim form from those relating to other types of donors. You should provide a summary of the items
eligible for Gift Aid and calculate the tax claimed on that total. Alternatively, for large events,
charities can use the modified procedure set out in paragraphs 6.6.9 - 6.6.14 of this guidance.
3.15.11 IR Charities is happy to advise charities on how to operate Gift Aid for sponsorship events,
and to review draft sponsorship/declaration forms.
3.16 Deeds of Covenant - transitional arrangements
3.16.1 From 6 April 2000 there is no longer a separate tax relief for payments made by an individual
(or a company) under a Deed of Covenant - in future all tax relief for such payments is under the Gift
Aid scheme. As a transitional measure, charities do not have to get a Gift Aid declaration in respect
of payments under a Deed of Covenant that is already in existence before 6 April 2000. The Deed of
Covenant will stand in place of the Gift Aid declaration. However, any donations made outside the
terms of the Deed, or after expiry of the Deed, must be covered by a separate Gift Aid declaration.
3.16.2 Payments made under a Deed of Covenant executed on or after 6 April 2000 must be
covered by a Gift Aid declaration. Where a charity wishes to continue with the use of Deeds of
Covenants for donors, these can also be used as declarations provided all the information required
in the declaration is given on the Deed.
3.16.3 The abolition of a separate tax relief for payments made under a Deed of Covenant to a
charity does not mean, of course, that such deeds will cease to exist. It does mean that they are no
longer required so that a charity can reclaim tax on the donations. Some charities may decide to
continue to obtain Deeds of Covenant from their supporters in order to secure a regular flow of
income. If they do so, they will need to make sure they also obtain a Gift Aid declaration from the
donor, or ensure the Deed contains the necessary elements required in such a declaration.
53. Mrs Jones has a Deed of Covenant in force with her local church to pay £2 weekly. The Deed
commenced on 1 January 2000, and will cease on 31 December 2003. On 1 September 2000 she
increased her weekly donations to £3 per week.
Mrs Jones will need to make a Gift Aid declaration in relation to the additional £1 a week she is
giving, if she wants the amount to come within the scheme. Even if she does not, she will need to
make a declaration after December 2003 if her original donations of £2 are to continue to be tax
Alternatively, if Mrs Jones is willing, the church may decide to cancel the covenant with effect from 6
April 2000 and replace it with an open Gift Aid declaration in relation to all donations made by her on
or after 6 April 2000.
Mrs Jones can make a Gift Aid declaration from 6 April 2000, even if the covenant remains in force,
to cover the deed payments and any other donations she may make to the church.
3.16.4 From 6 April 2000 IR Charities will no longer give advice on the drafting of Deeds of
Covenant for individuals (or companies).
3.16.5 A loan or deposit covenant is an arrangement under which the covenantor pays to the charity
a lump sum equal to all the payments which will fall due over the life of a Deed of Covenant. The
lump sum is treated as a loan or a deposit and the payments under the Deed are treated as being
paid from this fund as they fall due.
3.16.6 For Gift Aid purposes, however, payment will be deemed to have been made when the lump
sum is made over to the charity, and tax relief for the charity and donor will be for the year in which
this occurs. Charities will need to ensure, if they continue to seek deposit covenants, that any loans
or deposits they receive from a supporter who has an open Gift Aid declaration in place are
supported by a deed making over the amount to the charity over a period of time. Loans or deposits
that are returnable should not feature in a Gift Aid claim.
3.16.7 As a transitional concession, however, payments due under a loan or deposit covenant on or
after 6 April 2000 which were prepaid before 6 April 2000 will be treated as new Gift Aid donations
paid on the due date. The amount due under the deed will be treated as paid on the date it is
converted from a loan or deposit to a payment. This will ensure that tax relief will not be lost, as
would otherwise be the case, on loan or deposit covenants taken out prior to 6 April 2000.
3.16.8 Additionally, in the case of deposit covenants in existence at 5 April 2000, the outstanding
loan can be converted into a Gift Aid payment, providing there is evidence that the charity are
content to release the donor from the covenant and the donor wishes the deposit to be treated as a
SECTION C: GIFT AID FOR COMPANIES FROM APRIL 2000
54. 3.17.1 From 1 April 2000 Gift Aid donations made by companies to charities must be paid without
deduction of income tax. No declarations are required. There are also special rules for companies
owned by charities, allowing them to set off the donation in an earlier accounting period than the one
in which the donation was made.
3.18 Commencement date
3.18.1 In the case of donations by companies, the new Gift Aid measures will apply to all donations -
including covenanted payments - made on or after 1 April 2000, (even if paid under a Deed of
Covenant executed before that date).
A Deed of Covenant executed on 1 April 1999 provides for a company to make covenanted
payments of "such an amount as after deduction of tax equals £1,000". While the basic rate is 22
per cent, the company is required to make gross payments of £1,282 (£1,282 less tax at 22 per cent
= £1,000). From 1 April 2000, the company will simply pay the gross amount (£1282) and claim tax
relief for this amount when calculating its profits for corporation tax.
3.19 Abolition of the £250 minimum limit
3.19.1 From 1 April 2000, the £250 minimum limit for Gift Aid donations by close companies was
3.20 Non-resident companies
3.20.1 From 1 April 2000, non-resident companies within the UK corporation tax regime can make
Gift Aid donations. However, non-resident companies within the UK income tax regime cannot make
Gift Aid donations.
3.21 Deduction of tax
3.21.1 From 1 April 2000 companies, including companies owned by a charity and unincorporated
associations, such as clubs and societies, must no longer deduct tax from their Gift Aid donations.
3.21.2 The charity cannot reclaim tax on donations it receives from a company on or after 1 April
2000. There is no space on the claim form R68 (2000) for a claim to tax repayment on company
donations. If a company incorrectly deducts tax from its donation, the company should be told about
the new rule and asked to pay to the charity the sum it has incorrectly deducted. The change to
gross giving for companies is noted on the CT61 (Z) returns issued quarterly to companies.
3.22.1 From 1 April 2000 the company making the Gift Aid donation no longer completes a
certificate (R240 (SD)) or makes a declaration.
55. 3.23.1 As far as the charity is concerned, it need do no more than keep the necessary accounting
records normally required to record donations. The company should retain any correspondence with
the charity in relation to the donation (a `thank you' letter, for example), as evidence of making the
3.24 Carry-back to a previous accounting period
3.24.1 Charities often set up wholly owned companies to carry out activities that might result in an
income tax or corporation tax liability if carried out by the charities themselves. This is because
some activities fall outside the tax exemptions afforded to charities in the Taxes Acts. These
companies often enter into a profit-shedding Deed of Covenant with the parent charity, or Gift Aid
arrangements, under which they pay to the charity a sum equivalent to the profits assessable to
corporation tax. Some deeds may provide for a percentage of the taxable profit to be paid, or even a
3.24.2 Under normal corporation tax rules, companies can only claim a deduction for a charge (such
as a Gift Aid donation) in their tax computations in the accounting period in which the charge was
paid. If a company wished to pay over to charity an amount equal to its corporation tax profit, it
would be obliged to determine that profit by the end of the accounting period. This would be difficult
to do because the accounts of the company would not have been drawn up at that stage.
3.24.3 Under the provisions introduced by Finance Act 2000, payments made by a company under a
profit-shedding deed to a charity will fall within the Gift Aid Scheme if made on or after 1 April 2000.
They are paid without deduction of tax and without the need for a declaration, as detailed above in
sections 3.21 and 3.22.
3.24.5 Unlike other types of companies, charity-owned companies have nine months from the end of
the accounting period in which to determine the amount they wish to give or are obliged to pay to the
charity under a profit-shedding deed. They can then claim the deduction against the corporation tax
profits of the accounting period to which the payment relates.
3.24.6 The new Gift Aid provisions in relation to charity-owned companies come into force for
donations made on or after 1 April 2000, even if the donation relates to an accounting period which
ended on or before 31 March 2000.
The shares in Charity A Enterprises Ltd are all owned by Charity A. The company's accounting
periods end on the 31 December. In the year ended 31 December 1999 it made a corporation tax
profit. Provided it made a Gift Aid donation to its parent charity on or after 1 April 2000, but not after
30 September 2000, the donation could be deducted as a charge in the company's corporation tax
computations for the accounting period ended 31 December 1999.
56. 3.24.7 With the removal of the requirement for companies to deduct tax from Gift Aid donations, IR
Charities no longer repay any tax or require over-repayments from charities to be adjusted. For Gift
Aid purposes, IR Charities will simply expect to see an amount deducted in the charity-owned
company's accounts and a matching entry in the charity's accounts. Where a charity-owned
company makes a donation to its parent charity, to extinguish any corporation tax liability, and this
proves to be excessive and is partly repaid by the charity, IR Charities will expect to see some sort
of evidence that the intention was to pay over the annual profits (correspondence, Board minutes or
profit-shedding deed), and that any money paid over was clearly provisional or loaned until the
profits were finalised. If there were a need for the charity to repay some of the money, again IR
Charities would look for evidence of the purpose of the payment by the charity to the company. In
cases where the charity-owned company makes Gift Aid donations less than the full amount of the
corporation tax profit within the nine-month period, no further relief can be given in the company's
earlier accounting period for any remaining profit subsequently paid over in Gift Aid donations to the
3.24.8 The nine-month carry-back facility only applies to companies that are wholly owned by a
charity. In the case of a company limited by share capital, this means that all the ordinary share
capital must be owned by one or more charities. The share capital can be owned directly or
indirectly (through an intermediate company, for example).
3.24.9 However, charity-owned companies are not confined to ones limited by share capital. Some
companies controlled by charities are limited by guarantee. This type of company is also included in
the nine-month carry-back provisions if every person who is beneficially entitled to
* participate in the company's profits, or
* share in the net assets at a winding- up
is a charity or a company wholly owned by a charity. The Memorandum and Articles of a company
limited by guarantee will normally indicate if the company meets the conditions outlined above.
SECTION D: BENEFITS RECEIVED BY DONORS
3.25.1 Charities may wish to give a token of appreciation by way of a thank you to their donors for
their donations. Modest benefits received in consequence of making a donation will not stop the
donation from qualifying as a Gift Aid donation, provided their value does not exceed certain limits. If
a charity wishes to provide benefits to its donors - for example, as part of a membership scheme - it
should consider whether the benefits it intends to provide fall within the limits in the donor benefit
rules given below. If the benefits exceed the limits, then the donation cannot qualify under the Gift
57. Aid Scheme.
3.25.2 In order to decide whether a donation can qualify under the Gift Aid Scheme, the charity
needs to determine:
* whether the donor, or a person connected with the donor, receives any benefits in consequence
of making the donation, other than of the type detailed in Section 3.27 below, which can be
• if benefits are received, whether their value exceeds the limits in the donor benefit rules.
3.25.3 A person is connected with the donor if that person is
* the wife or husband
* a relative (brother, sister, ancestor (e.g. mother) or lineal descendant (e.g. grandson)
* the wife or husband of a relative
* a company under the control of the donor, or under control of connected persons.
3.26 What is a benefit?
3.26.1 A benefit is:
* any item or service
* provided by the charity or a third party
* to the donor or a person connected with the donor
* in consequence of making of the donation.
3.26.2 If goods or services are provided for the donor by an unconnected third party entirely
unsolicited by either the charity or the donor, such goods or services will not be considered to be
benefits for the purposes of these rules.
3.27 What is not a benefit?
3.27.1 A mere acknowledgement of a donor's generosity in a charity's literature (e.g. a theatre
programme) or on a plaque etc will not amount to a benefit, provided the acknowledgement does not
take the form of an advertisement for the donor's business (as might be evidenced by the size and
prominence given to the acknowledgement). The wording should be confined to thanks for the
support the donor has given, together with the donor's name, and/or their logo.
Right of admission to view heritage property or wildlife
3.27.2 A free or reduced-price right of admission to property is disregarded if:
* it is to view property, the preservation of which is the charity's sole or main aim, or
* it is to view wildlife, the conservation of which is the charity's sole or main aim, and
* it is restricted to the donor and members of his or her family, and
* it is available to any member of the public who makes a similar donation.
58. 3.27.3 This relaxation of the donor benefit rules does not apply if the benefit extends beyond a right
of admission to view property or wildlife (e.g. a right of admission to a heritage property to attend a
concert). Depending on the objects of the charity, however, the relaxation may extend to the viewing
of property or wildlife that is not directly under the control of the charity (to view a heritage property
belonging to another similar charity by a reciprocal agreement, for example).
3.27.4 The relaxation does not apply if the benefit extends beyond the donor and members of his or
3.27.5 The Inland Revenue recognises, however, that, in practice, charities:
* will often want to lay down rules for the maximum number of people that a donor may bring into
the charity's premises, and
* cannot be expected to check the identity and family relationship of people who seek admission to
The Inland Revenue will therefore accept that rules that are intended to restrict the right of
admission to family groups - such as a right of admission for the donor and up to two other adults
and six children -satisfies the "members of the family" test.
3.28 The donor benefit rules
3.28.1 The donor benefit rules contain two limits for the value of the benefits that a donor, or a
person connected with the donor, may receive in consequence of making a donation. If the value of
the benefits received exceeds either of these limits, the donation will not qualify as a Gift Aid
donation. A donation will not qualify if:
* the value of the benefits exceeds the limits in the table at paragraph 3.29.1 (the relevant value
* the value of the benefits plus the value of any benefits received in consequence of any Gift Aid
donations made by the same donor to the same charity earlier in the same tax year exceeds
£250 (the aggregate value test).
3.29 The relevant value test
3.29.1 The limits for the relevant value test are:
Amount of donation Value of benefits
£0-100 25% of the donation
£1001+ 2.5% of the donation
These limits apply separately to each donation.
59. 3.29.2 Special rules apply to "annualise" the amount of certain donations and the value of certain
benefits for the purposes of applying the limits. Broadly, in the case of subscriptions under a
membership scheme, the limits normally apply by reference to the amount of the annual
membership subscription and the value of the annual membership benefits. This way:
* a charity can tell whether the benefits in its membership scheme will exceed the limit simply by
looking at the annual membership subscription and the annual membership benefits
* the result will be the same whether the donor pays the subscription in a single payment, or half-
yearly, or quarterly, or monthly.
When these principles are borne in mind, the calculations for the relevant value test can be seen in
3.29.3 Annualising applies where a benefit:
* consists of the right to receive benefits at intervals over a period of less than twelve months, or
* relates to a period of less than twelve months, or
* is one of a series of benefits received periodically in consequence of making a series of
donations at intervals of less than twelve months, or
* is a one-off benefit received in consequence of making a donation that is one of a series of
donations made at intervals of less than twelve months.
3.29.4 In each of the first three categories, the amount of the donation and the value of the benefit
are annualised, so that the limits in the table at paragraph 3.29.1 apply by reference to the annual
amount and the annual value respectively. In the final category, the amount of the donation, but not
the value of the benefit, is annualised, so that the limits in the table at paragraph 3.29.1 apply by
reference to the annual amount of the donation and the actual value of the benefit.
3.29.5 Annualising is done by:
* multiplying the amount of the donation or the value of the benefit by 365, and
* dividing the result by
* the number of days in the period of less than 12 months, or
* the average number of days in the intervals of less than 12 months.
In practice, where the period or the intervals are measured in calendar months, annualising can be
done by reference to calendar months, rather than days.
3.29.6 The following examples illustrate how the relevant value test works:
Ms Smith makes four unconnected donations to a wildlife charity as follows:
Date Amount Benefits
6 May 2000 £30 nil
21 June 2000 £10 nil
18 August 2000 £25 nil
60. 5 February 2001 £80 fashion book worth £30
As no benefits are received in consequence of making any of the first three donations, they all pass
the relevant value test.
The book received in consequence of making the fourth donation does not fall into any of the
categories at paragraph 3.29.3, so annualising does not apply. As the value of the book (£30)
exceeds the limit of £20 (i.e. 25% of the £80 donation) the fourth donation fails the relevant value
test and so cannot qualify as a Gift Aid donation.
Mr Patel makes a single payment of £240 to a medical charity, in consequence of which he receives
the right to receive 12 free monthly computer magazines worth £2.50 each. The benefit of the right
to receive the magazines is therefore worth £30 (£2.50 x 12).
The right to receive the magazines does not fall into any of the categories at paragraph 3.29.3, so
annualising does not apply. As the value of the right to receive the magazines (£30) exceeds the
limit of £25 (i.e. the limit for donations of £100 - £1,000) the donation fails the relevant value test and
so cannot qualify as a Gift Aid donation.
Mrs O'Connor makes a single payment of £120 to the same medical charity, in consequence of
which she receives the right to receive six free monthly computer magazines worth £2.50 each. The
benefit of the right to receive the magazines is therefore worth £15 (£2.50 x 6).
The right to receive the magazines falls into the first category at paragraph 3.29.3 (a right to receive
benefits at intervals over a period of less than twelve months) so annualising applies. The limits in
the table at paragraph 3.29.1 therefore apply by reference to the annual amount of the donation
£240 (£120 x 12 ÷ 6) and the annual value of the right to receive the magazines £30 (£15 x 12 ÷ 6).
As the annual value of the right to receive the magazines exceeds the limit of £25 (i.e. the limit for
donations of £100 - £1,000) the donation fails the relevant value test and so cannot qualify as a Gift
Mr Green makes a single payment of £120 to a performing arts charity, in consequence of which he
receives the right to a five per cent discount on theatre tickets purchased in the next six months. The
benefit of the right to the discount is worth, say, £15.
The right to the discount falls into the second category at paragraph 3.29.3 (a benefit relating to a
period of less than 12 months) so annualising applies. The limits in the table at paragraph 3.29.1
therefore apply by reference to the annual amount of the donation £240 (£120 x 12 ÷ 6) and the
annual value of the right to the discount £30 (£15 x 12 ÷ 6). As the annual value of the right to the
discount exceeds the limit of £25 (i.e. the limit for donations of £100 - £1,000) the donation fails the
61. relevant value test and so cannot qualify as a Gift Aid donation.
Miss Tomkins makes monthly payments of £20 to a medical charity under an open-ended standing
order, in consequence of which she receives a free monthly computer magazine worth £2.50.
The right to receive the magazines falls into the third category at paragraph 3.29.3 (a benefit which
is one of a series of benefits received in consequence of making a series of donations at intervals of
less than twelve months) so annualising applies. The limits in the table at paragraph 3.29.1
therefore apply by reference to the annual amount of the donation £240 (£20 x 12 ÷ 1) and the
annual value of the right to receive the magazines £30 (£2.20 x 12 ÷ 1). As the annual value of the
right to receive the magazines exceeds the limit of £25 (i.e. the limit for donations of £100 - £1,000)
the donation fails the relevant value test and so cannot qualify as a Gift Aid donation.
Mr Wong makes monthly payments of £2 to a charity under an open-ended standing order. In
consequence of starting the payments he receives a one-off benefit of a free pen worth £5.
The pen falls into the fourth category at paragraph 3.29.3 (a one-off benefit received in
consequence of making a donation which is one of a series of donations made at intervals of less
than twelve months) so annualising applies to the donation, but not the benefit. The limits in the
table at paragraph 3.29.1 therefore apply by reference to the annual amount of the donation £24 (£2
x 12 ÷ 1) and the actual value of the pen £5. As the value of the pen does not exceed the limit of £6
(i.e. 25% of the £24 annual donation) the donation passes the relevant value test and so can qualify
as a Gift Aid donation.
3.30 The aggregate value test
3.30.1 In addition to satisfying the relevant value test, the value of the benefits received in
consequence of a donation must also satisfy the aggregate value test if the donation is to qualify as
a Gift Aid donation. In other words:
* the value of the benefits received in consequence of making the donation
* plus the value of any benefits received in consequence of any Gift Aid donations by the same
donor to the same charity earlier in the same tax year
* must not exceed £250.
The value of benefits is not annualised for the purposes of the aggregate value test. It is the actual
value, as opposed to an annual value, of the benefits that counts.
3.30.2 For example, suppose in example 1 in paragraph 3.29.6 above Ms Smith makes two further
donations to the charity in the tax year 2000-2001 as follows:
Date Amount Benefits
11 March 2001 £9,600 weekend break worth £225
4 April 2001 £4,000 dinner for two worth £90
62. As the value of the weekend break does not exceed the limit of £240 (i.e. 2.5% of the £9,600
donation) the fifth donation passes the relevant value test. Furthermore, it passes the aggregate
value test (it is not aggregated with the benefit worth £30 received in consequence of the fourth
donation, because that donation did not qualify as a Gift Aid donation).
As the value of the dinner for two does not exceed the limit of £100 (i.e. 2.5% of the £4,000
donation) the sixth donation passes the relevant value test. However, it fails the aggregate value
test, because the value of the dinner for two plus the value of the weekend break exceeds £250.
Therefore, the sixth donation cannot qualify as a Gift Aid donation. The other five donations are
3.31 Valuing donor benefits
3.31.1 The valuation of donor benefits can be difficult. The starting point should be to look at the
value of the benefits made available. Where the item or service, or a comparable item or service, is
sold to the public (whether by the charity or someone else) on arm's length terms (for example, a
ticket to attend a performance by a charitable opera society), the value of the benefit will generally
be the sale price to the public. Where the value of the benefit is less immediately obvious, the charity
will need to determine how much someone dealing with it at arm's length would be prepared to pay
for the benefit. Evidence might be obtained from similar transactions in the commercial sector.
3.31.2 The value to be arrived at is the value to the recipient. Consideration in the form of a third
party discount or benefit may cost the charity nothing to provide but will still be of value to the
3.31.3 Where a benefit takes the form of attendance at an event that is not open to the public (so
that there is no ticket price) the benefit should be valued by reference to the cost to the charity of
staging the event and the number of people in attendance.
3.31.4 Where a benefit is given in return for a life membership subscription the value of all benefits
that will be received over the lifetime of the membership must be estimated when valuing the benefit.
For practical purposes the benefits received over the first 10 years of membership will be taken as
the benefits received over the life of the member when deciding whether the benefit limits have been
3.31.5 Where the benefit takes the form of, for example, a discount on purchases from a museum
shop, the valuation needs to take account of factors such as the take-up of the discount by the
3.32 Provision of literature
3.32.1 Where a charity sends literature to its donors, the Inland Revenue will accept that the value is
nil provided the material is produced for the purpose of describing the work of the charity. The
material must be relevant to and distributed in furtherance of the objects of the charity. The fact that
the literature has a cover price and is also is on sale to members of the public is not relevant. This
means that literature like newsletters, bulletins, annual reports, journals, members' handbooks and
programmes of events will generally carry no value for the purposes of the donor benefit rules.
63. 3.33 Charity auctions
3.33.1 When an item is purchased at auction, the sale price can normally be taken as the value of
the item. However, the Inland Revenue recognises that when a person purchases a lot at a charity
auction they may intentionally pay more than it is worth in order to support the charity. If it can be
shown that the market value of a lot purchased at a charity auction is less than the sale price paid
for the lot, the lower figure can be taken as the value of the lot. This will only apply where an item
has a clear and recognisable value. Where the value of an item has been enhanced, for example
because it has been owned by a celebrity, the market value will not be the original price of the item
but the amount it fetches in the auction.
A travel agent gives a weekend break that normally retails for £225 as a lot for a charity auction. Ms
Smith purchases the weekend break with a bid of £9,600. As the value of the weekend break does
not exceed the limit of £240 (i.e. 2.5% of £9,600) the payment of £9,600 passes the relevant value
test and so can qualify as a Gift Aid donation.
A famous pop music star gives a pair of her shoes for a charity auction. These shoes normally retail
for £150. Mr Webster purchases the shoes with a bid of £10,000. Although the shoes retail for £150,
because a celebrity has owned them, their value has been considerably enhanced. The market
value for these shoes will be £10,000, and the Gift Aid Scheme cannot be used.
3.33.2 Even if a purchase at a charity auction fails the relevant value test, it might still be possible to
pay by means of a split purchase (on which, see section 3.34 below).
3.34 Split payments
3.34.1 Where the value of benefits would exceed the limits in the donor benefit rules, the donor may
specify that part of his or her payment is to be treated as payment for the benefits and part is to be
treated as a donation. This treatment can only apply where the item has a readily ascertainable
value and the excess has a clear donative purpose. Provided the donor specifies this before, or at
the time of making the donation, the part of the payment that is specified as a donation may qualify
as a Gift Aid donation, provided it satisfies all the conditions for the tax relief. The charity and donor
should keep evidence of how the payment was to be split - a copy of a dated letter accompanying
the payment, for example. Alternatively, separate payments could be made.
3.35 Donations to support missionaries and other full-time workers for a charitable cause
3.35.1 Gift Aid only applies to unfettered gifts to a charity for its charitable purposes. Donors
earmarking money for the support of relatives are, in principle, no different from those generally
making payments to support other relatives, for whatever reason. These are not tax relieved. Once a
Gift Aid payment has been received it is for the charity to show that its income has been applied for
charitable purposes only. Gifts given on condition, rather than hope or expectation, that they will be
used to feed and clothe a relative are likely to breach the benefits rules for Gift Aid.
64. 3.35.2 The Inland Revenue takes the view that donations to cover the costs incurred by a charity
such as a missionary society in supporting the relative of the donor, as a missionary, can qualify
under the Gift Aid scheme provided the missionary society is not merely channelling a donation to
the donor's relative. Where, for example, a missionary society says to its workers "It costs us
£10,000 a year to support you while you carry out your charitable work. We look to you to raise at
least this amount of funds for the society through donations from family, etc" the donations may
qualify under the Gift Aid scheme. Where, on the other hand, a missionary society says to its
missionaries "It is up to you to support yourself while you carry out your charitable work, with the
help of your family, etc. If your family wish to send you money they can do so via the Society"
payments will not qualify under the Gift Aid scheme.
3.35.3 This situation equally applies where a church, for example, supports the charitable work of a
Christian worker. The Christian worker is unlikely to be in the employment of the Church and so the
onus in demonstrating that payments made to particular individuals are unfettered and only applied
for charitable purposes falls to the trustees of the church.
SECTION E: KEEPING GIFT AID RECORDS
3.36.1 In order to operate the Gift Aid scheme, charities need to keep records to show how much
has been received from each donor who has made a declaration. Charities must keep sufficient
records to show that their tax reclaims are accurate. In other words, they must keep records that
enable them to show:
* an audit trail linking each donation to an identifiable donor who has given a valid Gift Aid
* that all the other conditions for the tax relief are satisfied (provision of benefits, for example).
3.36.2 If a charity does not keep adequate records it may be required to pay back to the Inland
Revenue tax reclaimed, with interest. It may also be liable to a penalty under the Self-Assessment
3.37 Records to be maintained
3.37.1 The form of records to be kept is not prescribed in the legislation and has not changed
significantly as a result of the revised Gift Aid measures. In practice, it will depend on the size of the
charity, the number of donors and the kind of systems used.
3.37.2 In the event that IR Charities audits the tax reclaim, the auditor will usually ask to see, as
appropriate, in respect of a donation:
* any written Gift Aid declaration
* in the case of an oral Gift Aid declaration, a copy of the written record sent to the donor
65. * any correspondence to or from the donor which relates to the donation, including
* any notification of a change of name or change of address
* any notification of the cancellation of the Gift Aid declaration
* the charity's bank statements
* the charity's bank paying-in book stubs showing details of cheques and cash banked
* statements received from credit card companies showing details of credit card donations
* the charity's cashbook recording the receipt of cash donations
* if the charity uses envelopes to collect cash donations, a sample of the envelopes and a record
of the sums enclosed
• any other records the charity keeps relating to the donation.
3.38 Means of keeping records
3.38.1 The charity does not have to keep records on paper. They may be held on the hard drive of a
computer, floppy disc or CD-ROM, or stored on microfiche. If records are kept on computer, it is
advisable to make regular back-ups and store these in a different location to the computer. Further
details on the procedures to follow when transferring original records onto microfiche or an electronic
medium can be found in section 7.4 in Chapter 7.
3.39 How long should records be retained?
3.39.1 Please see section 7.3 in Chapter 7 – (available from
3.40 Using envelopes to collect cash donations
3.40.1 Charities may choose to collect cash donations in envelopes, such as church stewardship
envelopes, so that they can show an audit trail linking the donation to the donor. For one-off
donations, charities may choose to pre-print the Gift Aid declaration on the envelope for completion
by the donor. If the donor is a regular supporter, the charity may already hold his or her Gift Aid
declaration, in which case the envelope need simply contain either:
* the donor's name, or
* some other unique identifier, such as a reference number which can be cross-referenced to a
3.40.2 Where a unique identifier is used, such as a reference number, ideally this should be unique
to the donor. In practice, where envelopes containing the same unique identifier are used by the
donor and his or her spouse and minor children, it can assumed that all the donations are from the
donor, unless there is evidence to the contrary.
3.40.3 When the envelope is opened and the contents are counted, an official of the charity should
record the sum that it contained both:
* on the envelope, and
* in a donor record.
66. 3.40.4 Charities should retain for the period set out in section 7.3 in Chapter 7:
* all envelopes on which a Gift Aid declaration is printed
* a sample of other envelopes (normally for one month of the year)
* the donor record.
3.41 Joint donations
3.41.1 If a charity receives a donation drawn on a joint bank account, and it has not been given a
Gift Aid declaration by all of the account-holders, it will need to determine whether the donation is
from a donor who has given a Gift Aid declaration. It can normally be assumed that the donation is
from the account-holder who signs the cheque, debit card slip or direct debit mandate or standing
order mandate. In the case of a donation received over the phone or through the Internet, it can
normally be assumed that the donation is from the account-holder who authorises the transaction.
3.41.2 Similarly, if a credit card donation is received drawn on an account in respect of which there
is more than one authorised signatory, it can normally be assumed that the donation is from the
authorised signatory who signs the credit card slip. In the case of a donation received over the
phone or through the Internet, it can normally be assumed that the donation is from the person who
authorises the transaction.
3.41.3 If there is any doubt whether the donation is from the person who signs the cheque, etc. or
authorises the transaction, the charity should ask them to confirm whether the donation is from
SECTION F: PARTICULAR SITUATIONS
IR Charities are occasionally approached on Gift Aid issues where possibly a number of charities
might be affected by the decision we arrive at. The purpose of this section is to alert charities to the
Inland Revenue view of particular situations involving the use or proposed use of the Gift Aid
3.43 Educational school trips
3.43.1 Inland Revenue Charities received approaches from schools and PTA's enquiring if Gift Aid
could be used in respect of voluntary contributions toward educational school trips.
3.43.2 The following text has been passed to the Department of Education and is to be included in
advice issued by the department to schools.
In schools, other than independent schools, the education provided wholly or mainly during school
hours is free. This means that head teachers may not impose a charge on parents for any visit that
is undertaken as part of the National Curriculum and occurs during school hours. The head teacher
may, however, ask for a voluntary contribution.
67. Parents must be made aware that the contribution is not compulsory, and the children of parents
who do not contribute may not be discriminated against. It is permissible for the school to ask
parents to contribute more than the minimum amount in order to subsidise those pupils whose
parents have not contributed. However, if there are not enough voluntary contributions and the
shortfall cannot be made up, the visit may have to be cancelled.
Voluntary parental contributions to charitable schools or charities associated with LEA schools to
assist schools to send pupils on educational school trips in school time may be eligible for tax relief
under the Gift Aid scheme, provided the usual requirements of the scheme are satisfied and in
* Parental contributions are made on the basis that they are not refundable (and are not in any
event refunded) if the trip does not go ahead or if their child does not go on the trip
* Any benefit arising from the school trip does not exceed the maximum level of permissible
benefit for the donation.
For a donation of £0 - £100 the value of the benefits must not exceed 25% of the donation. For a
donation of £101 - £1000 the value of the benefits must not exceed £25.
Benefits include travel costs, trip insurance, cost of entry and associated educational material, cost
of food and drink supplied and any other costs associated with the trip (costs averaged per pupil if
In general, however, it is likely that the benefits associated with a school trip contribution will exceed
the maximum level of permissible benefits and so the donation will not come within the Gift Aid
The cost of an educational trip to a local museum amounts to £8 (transport £5 entry £2 and
brochure £1). The school asks for a voluntary contribution of £10. The payment of £10 cannot be
made under the Gift aid scheme as the benefit of £8 exceeds the 25% limit (80%).
However, provided the requested contribution is not less than the benefits, any payment in excess
of the requested contribution can be Gift Aided.
The position is the same as in example 1 but a parent makes a voluntary contribution of £15 instead
of the requested £10. The additional £5 can be made as a Gift Aid payment.
Inland Revenue Website
General information about the tax reliefs and exemptions available to charities is available on the
Inland Revenue website: http://www.inlandrevenue.gov.uk/ by clicking on:
68. · `Charities and charitable giving' (on left hand side of page); then
· `Guidance notes for charities'.
3.44 Church collections
3.44.1 We are frequently asked if collections made for particular charities by churches can fall within
the churches Gift Aid scheme. This will depend on the particular circumstances.
3.44.2 If the church has not exercised any discretion in collecting the donations and the donations
are merely given to the church to pass on to a particular charity then:
* the church has no entitlement to the donations (and they do not form part of the church's
* the church is merely acting as a conduit and it is the charity that is the donee; and
* the charity must claim any Gift Aid tax relief (subject to the normal requirements, Gift Aid
declaration and audit trail).
3.44.3 However, if the church exercises its discretion and decides to open a fund for donations to a
particular charity, then:
* the fund is a designated fund of the church;
* the church is the donee and the donations form part of the church's income; and
* the church is able to claim and Gift Aid tax relief (subject to the normal requirements).
3.44.4 We are also frequently asked if the tax reclaimed as well as the net Gift Aid donation should
be passed to the charity by the church. It is our view that a church would be legally obliged to pass
the tax associated with a Gift Aid payment to the charity. The donor would have made his donation
in expectation that both the Gift Aid donation and the associated Gift Aid tax would go to the charity
for which the collection was made.
3.45 Educational Trusts
3.45.1 The Inland Revenue has been approached by a number of educational trusts for clarification
of position of parents and persons connected to them making Gift Aid payments to such trusts.
3.45.2 Invariably the Trust is established to provide education for children as an alternative to State
education. Whilst parents may pay for text books, exercise books, exam fees and consumable
materials, they are not required to pay any fees to cover the costs of tuition and other overheads.
3.45.3 The Inland Revenue view of payments made by parents and persons connected to them, to
such trusts, under the Gift Aid scheme is that the benefit the donor or someone connected to them
receives will generally be in excess of the benefit limits.
3.45.4 The Inland Revenue view is based on the fact that there is a cost in providing education for
the child and this cost is met in consequence of the Gift Aid payments being made. This includes the
cost of tuition, heating and lighting of premises and other administrative costs, which would be taken
69. into account by a private school in setting fees.
3.45.5 In situations where the trust has a genuine fee structure in place i.e. fees are charged in
respect of all students and the fees are set at such a level that enables the trust to operate without
needing additional support, the Inland Revenue would accept that the benefit of receiving education
arises from payment of the fees. Consequently, the receipt of education would not be received as a
consequence of making donations over and above the fees and so those donations could qualify for
3.45.6 Where there is no fee structure or only nominal fees are charged, insufficient to enable the
trust to operate without additional donations we do not accept that the additional donations give rise
to no benefit. In considering whether the level of fees was sufficient to cover operating costs we
accept that trusts should be allowed to take account of reliable, ongoing income sources such as
endowments, but not one-off or periodic donations where no binding commitment exists.
Claiming Tax Back
How charities get started with Gift Aid
* Who can claim?
* How do we claim?
* Further information
Who can claim?
To claim repayment of tax under the Gift Aid scheme you must be a charity. In England and Wales,
you must be registered as a charity with the Charity Commission, unless you are excepted from
registration. Information about registering as a charity is available on the Charity Commission
website at www.charity-commission.gov.uk
In Scotland or Northern Ireland, the Inland Revenue must accept you as a charity. You should
contact our Edinburgh office for Scottish charities or our Bootle office for Northern Ireland charities.
The addresses and telephone numbers are shown below.
How do we claim?
New charities who want to claim exemption from tax and claim repayment of tax under Gift Aid
should write to Inland Revenue (Charities), Charity Title Section at the address below stating:
* The full address, including postcode, to which we should send all communications; and
* If registered, your Charity Commission registration number
* If not registered, a copy of your governing document and details of activities, along with copies of
any literature that explains your work.
* the date on which the accounting period of the charity ends
We will confirm your status as a charity and issue a reference number that you must state on all
70. future correspondence with us. We will also send you repayment claim forms R68 (2000) and R68
(New Gift Aid) and a form asking for the name and signature of authorised signatory who will sign
your repayment claims.
A charity can reclaim tax on any donations made by individuals, whether large or small, regular or
one-off - provided the conditions for the Gift Aid tax relief are satisfied. In particular, the charity will
have to be able to show an audit trail from the donation to a donor who has given a Gift Aid
declaration that covers that donation. A model Gift Aid declaration is available on the Inland
You will need to list on form R68 (New Gift Aid) the details of the donations for which you are
claiming. You then calculate the tax you are reclaiming on the total amount of donations. The
formula is on the bottom of the second page.
You should send your completed claim forms R68 (2000) and R68 (New Gift Aid) to the appropriate
Bootle or Edinburgh office. The repayment claim form R68 (2000) must be signed by the authorised
The guidance for charities on our website at www.inlandrevenue.gov.uk/menus/charity.htm contains
more detailed information on applying for charitable status (chapter 2) and Gift Aid (chapter 3). You
can also get more information by calling the Inland Revenue – (Charities).
Claiming Tax Back - Frequently asked questions
How often can we claim?
You can claim as often as you like, so long as the income on which the tax has been suffered has
been received by the charity. It would help us if you claimed a minimum amount of £100 each time
as this enables IR Charities to process claims faster.
How long will it take to get our money?
We aim to repay all claims within 10 working days. When a charity claims repayment for the first
time the process can take a little longer, as we need to ensure that all appropriate details about the
charity and its authorised official are held.
How much do we get back?
This will depend upon the amount of tax that has been deducted from the income on which you are
claiming repayment. The most common claim is in respect of Gift Aid. Here for every £1 given by
individual donors the charity will receive an extra 28p (whilst the basic rate of tax is 22%).
Can our membership subscriptions be Gift Aided?
Yes, subject to the requirements of the Gift Aid scheme being met. The donor benefit rules may
prevent subscriptions being paid under Gift Aid if the value of benefits provided to members exceeds
72. Studied/organised International Youth 1977–84 • Member of the Parochial Church
Exchange Visits • Personal sponsorship by Council – Parish of East Ham, London 1977–
The British Council • Organised/Co-Ordinated 87 & 2000 Todate • Parish Warden - East
successful public outdoor events designed to Ham Parish (St Alban's, St Bartholomew's, &
provide awareness + public display / exhibition St Mary's Magdalene), London - 1976/91 &
of youth clubs/organisations embracing 1999 Todate • Former Secretary St.
voluntary/ statutory bodies • Developer / Bartholomew's District Church Council - 1977–
Fundraiser, converting former part of school 87 & re-elected 1998 Todate - Parish Council
into youth exchange hostel • Inaugurated trust Member 1978 todate • Elected Member •
body as charity & limited company • Founded/ Newham Deanery Synod, London 1980–81
composed constitution for many groups. and 1982–84 • 2001 Todate - Member of The
Institute of Fundraising IT Special Interest
Senior Co-Ordinator - Parish of East Ham • Group • Registered Member of the Training
Night Shelter [Turnaround - Newham Night Consortium • Member of former British Apple
Shelter) - 1998 - 2003 • Fundraising & System Users' Group – (Apple 2000) • Former
Development Officer - London Borough of individual & Commercial Member • The
Newham Swimming Club 1985 - 2000 • Carnival Guild) • Former member • The
Fundraising & Development Officer – B&D National Camping & Caravanning Club •
CVS 2002 - 2003 • Vice-Chair - Barking Abbey Former member • Conway Owners Club •
Comprehensive School PTA • (Fete Former Member - National Union of Licenses
Chairperson/Co-Ordinator: 1993-94), Friends' Victuallers Association • Member • London
of Barking Church of England School - PTA • Macintosh Users' Group • Full Member of the
(Vice–Chairman: 1978–79 & Chairman: 1979– Institute of Charity Fundraising' • Former
85) / 1985/87 Executive Officer Newham member • Stop Steward (1982–84 & 1986 to
Youth Leader's Association • (Chairman: 1993) + Convener, Branch Officer/Information
1983–85 & Founder Member/Director), Technology Officer & Metropolitan Regional
currently Trustee & Company Secretary, Representative – UNISON, (formerly, NALGO)
Newham Youth Trust (Limited) • (Chairman: • [Newham Branch] • Member • Royal
1976–79), Youth & Community Worker, St. Horticultural Society • Former member • The
Bartholomew's Social Club 1984 to 1985 • Co– London Bungee Club • Member • Cyclists’
opted Member, London Borough of Newham Touring Club • Member • British Mountain Bike
Education Committee, Youth Panel 1983–84 Federation.
and 1985–1988 • Member, Newham Voluntary
Agencies Council – Children & Young People Chronicle of fundraising activities: Co-
Steering Committee 1981-83 • Founder & Coordinating groups of people from several
Developer Newham Youth Lodge Hostel parts of the world, residing at a hostel for
Project, 1979–94 • NYT • Never-Land international youth exchange visits in Newham
(Children’s Adventure) - 1993 - 2004 • NYT • on behalf of 'International' Duke of Edinburgh's
Metropolitan Police Newham Volunteer Cadet Award as part of VE/VJ day celebrations •
Corps, 1996 - 2004 • Youth Worker, St. Composing/designing new brochure and other
Barnabas Youth Club • Past Member, National promotional material, (with use of DTP) • Very
Youth Bureau, National Association of Youth successfully securing the services and
Clubs, and London Union of Youth Clubs • resources of one of the top major businesses
(Chairman & Co–Ordinator, 1980–85) - NYLA who deal with marketing, corporate identify
– All Our Own 1978-1984 • Regional Health and logo designs leading to a much more
Authority Appointee, Newham Community impressive and proficient relaunch of an
Health Council 1982–85 • Member, St. organisation in Newham • Duel Initiative-
Bartholomew's Development Committee objective of attracting new sources of grant aid
73. funding from outside and encourage other Borough of Newham Swimming Club • Inter-
organisations in the Borough to affiliate, (bring Action Trust • Base 51 [HINT] - Based in
in new blood), and significantly help ensure Nottingham. Face to face work with young
the efficient service delivery to groups • people suffering from homelessness;
Fundraising - sources ranging from HIV+AIDS, Drugs, Alcohol Abuse, Pregnant
local/central Government, companies & Trusts single women.
• Negotiated rent/terms for charity shop •
Fundraising work has included Newham Youth Biographical sketch work appears in various
Trust/Newham Youth Lodge Hostel Project; reference works to include: Who's Who in the
NYT • Never-Land (Children’s Adventure) • World • Who's Who in Industry and Finance •
NYT • Newham Volunteer Cadet Corps • Who's Who • Men of Achievement • The
International Duke of Edinburgh’s Award • Directory of International Biography • The
St.Margaret’s Church of England School - International Book of Honour • ICFMT - Who’s
[PTA funding for school resources + potential Who in Fundraising • Five Thousand
donors for building extension • London Personalities
of the World.