6.1.1 A charity or Community Amateur Sports Club (CASC) can claim repayment of UK basic rate tax that is treated as deducted from donations made to it by individuals under Gift Aid. There is no limit on the amount of a Gift Aid donation.
6.1.2 A charity cannot claim repayment of basic rate tax on donations made by companies, unincorporated businesses, trusts or other charities.
Donations from companies must not be included on claim form R68(i) when a charity or CASC claims back tax from HM Revenue & Customs (HMRC) Charities
6.1.3 The basic rate tax which can be claimed on Gift Aid donations made by individuals in part or all of a tax year can be calculated by using the fraction:
The basic rate of tax for the year × the amount
of the Gift Aid donations received
100 - the basic rate of tax for the year
So, for example, where the basic rate in force for a tax year is 20 per cent, the fraction will be 20/80 (20/ (100-20)). On a Gift Aid donation of £10, the tax reclaimable would be £2.50 (£10 x 20/80).
6.1.4 Charities can also claim back any Income Tax deducted from certain other types of income they receive, for example:
6.1.5 HMRC Charities can only repay UK tax. For repayment of foreign tax you should apply to the revenue department of the country concerned.
6.2.1 Charities and CASCs making Gift Aid repayment claims are entitled to a transitional relief relating to qualifying Gift Aid donations made in the tax years 2008-09 to 2010-11. The transitional relief is paid by HMRC when a claim for repayment of tax made within specific timescales is allowed.
6.2.2 The relief applies to Gift Aid repayment claims made on qualifying donations received by charities between 6 April 2008 and 5 April 2011 provided the claim is received within the time limits stated at paragraph 6.2.5.
6.2.3 Charities and CASCs should submit their Gift Aid repayment claims to HMRC using the 20 per cent basic rate of Income Tax. The rate of the transitional relief supplement is 2 per cent. It is applied by HMRC to qualifying donations made in the tax years 2009-10 and 2010-11 as long as claims are made within the specified time limits.
6.2.4 The relief is calculated by grossing up the donation by the sum of the basic rate (20 per cent) and the rate of the supplement (2 per cent). The amount of the relief due is the difference between that figure and the amount of the donation grossed up at the basic rate. The amount of the relief due is limited by the amount of the qualifying donations, so it will increase or decrease as the levels of qualifying Gift Aid donations received by a Charity or CASC increase or decrease.
6.2.5 Time limits apply to the payment of the transitional relief:
6.3.1 HMRC Charities will repay claims only if they are signed by an authorised official who has been notified to HMRC by the charity on form ChA1, ChV1 or CASC(A1), or by a nominee or collection agency. Dealing only with people that the charity has told HMRC are authorised to act on its behalf helps HMRC to cut fraud against the Gift Aid system.
6.3.2 When a charity or CASC signs up for Gift Aid on form ChA1 or CASC(A1), they must give details of at least two responsible persons within the charity or CASC and appoint at least one authorised official to deal with HMRC.
6.3.3 A responsible person is someone with legal responsibility for running the organisation and includes:
6.3.4 An authorised official must be a trustee, official, employee or other manager of the charity. A responsible person can also be named as an authorised official.
6.3.5 Any change to the authorised official must be made on form ChV1. The form must be signed by two people with the role of authorised official or responsible person who were in post before the changes notified on the form took place. If a person is no longer an authorised official, this must also be notified on form ChV1.
6.3.6 To avoid delay in processing repayments, any change to the authorised official, should be notified to HMRC at least one month before submitting a repayment claim.
6.3.7 The declaration on page 2 of the R68(i) claim form must be signed by an authorised official of the charity (unless the charity has appointed a nominee or collection agency to do this) who has already been notified on form ChA1, ChV1 or CASC(A1). The person signing that claim confirms that the claim is complete and correct and that the charity or CASC can claim exemption from tax for the period covered by this claim.
6.3.8 The ultimate responsibility for the accuracy and validity of any claim made in their name will remain with the charity concerned. Charity officials must therefore give careful consideration as to the suitability of any person or body they authorise to act on their behalf.
6.4.1 Before making a first repayment claim, a charity or CASC must have applied to be recognised as a charity for tax purposes and have received a unique charity reference number from HMRC. You can find details of how to do this in Chapter 2.
6.4.2 Charities and CASCs must make repayment claims using the form R68(i) (PDF 64K). Claims made on earlier versions of the claim form will be rejected. The form includes schedules where details of Gift Aid donors and their donations and other income must be entered. The R68(i) form must be signed by an authorised official of the charity or a nominee or collection agency appointed by the charity.
6.4.3 If a charity asks for payment of claims to be made into a separate
bank account because, for example, the charity is launching an appeal
fund, a separate subsidiary reference number will be needed. The charity
will need to apply on form ChA1 in advance of the appeal and send it
along with documentary evidence relating to the appeal to HMRC Charities.
6.4.4 You will find help and guidance on filling in the R68i claim form by following the links below.
6.5.1 Claims must be made within four years of the end of the tax year (for charitable trusts) or the accounting period (for other charities and CASCs) to which they relate. Claims made late will not be paid.
6.5.2 For example, for a charity that is a trust a donation on 1 December 2010 falls in the tax year 6 April 2010 to 5 April 2011. So a Gift Aid claim would have to be made in respect of that donation by 5 April 2015.
6.5.3 If the charity or CASC is a company with an accounting period ending on 31 December, a donation on 1 December 2010 would fall in the accounting period ended 31 December 2010 and so the Gift Aid claim would have be made by 31 December 2014.
6.6.1 Claims can be made in respect of donations received in any period in any tax year, subject to the time limits set out above at section 6.5, or for the whole of one or more accounting years. When you enter the charity’s accounting date on form R68(i), schedules will be produced for each in-date year of your claim for you to complete and send to HMRC.
6.6.2 Where a charity has not kept an auditable recording of a telephone Gift Aid declaration and issues written confirmation statements to donors to validate their Gift Aid declaration (see paragraphs 3.12.2 and 3.13.1), a claim can only be made after the written confirmation has been sent to the donor.
6.6.3 Claims can be submitted as frequently as a charity wants. Claims may not be paid, however, where the amounts being reclaimed are small (under £100) and the charity makes more than one claim in each tax year.
6.6.4 If your Charity’s claim contains more than 50 separate entries you may, if you wish, use your own typed schedules. This can be done by attaching them to the completed form, although you must enter the totals from each schedule on the R68(i). If there are more than 200 separate entries you can submit the information on a disc, although you must enter the totals from each schedule on the R68(i).
6.6.5 Repayment interest may be due and payable on a Gift Aid claim. Interest is calculated as follows:
If repayment interest is due, HMRC Charities will calculate the amount due and will pay the total tax claimed plus interest due together as a single payment to the Charity or CASC.
6.6.6 Please tell HMRC Charities on form ChV1 as soon as possible if the name of the charity changes or if there is a new signatory. Do not wait until the next claim as this may cause delay in the processing of the claim.
6.6.7 Charities that organise sponsored events are able to claim Gift Aid on the pledged donations if the donors (that is, the sponsors, not the participators) complete Gift Aid declarations. These declarations can be incorporated into the sponsor forms - please see the model Gift Aid Sponsor form (PDF 78K)
6.6.8 Where the number of donors is relatively small, charities should include the donor details on the R68(i) Gift Aid Schedule.
6.6.9 For larger events, where it is expected that Gift Aid claims will be made in respect of very large numbers of donors, this approach may not be practical. If this is the case, HMRC Charities will accept claims on a special, modified, basis.
6.6.10 There is no need to seek approval in advance for the use of this modified procedure. However, HMRC Charities will be happy to give advice on sponsorship arrangements, in advance of an event, to help charities get it right first time. Please phone our Charity Helpline on Tel 08453 02 02 03 (Option 6), between 8.00 am and 5.00 pm, Monday to Friday.
6.6.11 The modified procedure applies as follows. Individual donor details do not need to be included on the R68(i) Gift Aid Schedule. Instead, the schedule should list the total amounts on each individual participator’s sponsor form for which Gift Aid declarations have been made. Donations for which Gift Aid has not been claimed must not be entered on the schedule. Each entry on the R68(i) Gift Aid Schedule under the heading 'Name of Donor' should include the name of the event including the word 'sponsored.' For example, 'Sponsored Walk 14 August' and identify the sponsor sheet in question, either by use of the participator’s name or by use of an individual reference. The charity should enter further details in the additional information box at the end of the form.
6.6.12 Charities using the modified claims basis must retain the original sponsor sheets and be able to produce them in the event of HMRC Charities wanting to audit their Gift Aid claim. This is because the sponsor forms contain the donors' declarations of tax paid by the donors and form part of the audit trail connecting the payments and declarations to the charities' claims to repayment of the tax.
6.6.14 Charities and CASCs can add together small donations that they receive from multiple donors on the R68(i) Gift Aid Schedule within certain limits.
The limits are:
6.6.16 The entries on the schedule must be sensible descriptive labels that will enable the Charity or CASC to find the relevant Gift Aid declarations to provide an audit trail to the information that supports the amounts listed on the schedule.
6.6.17 The adding together of small donations cannot be applied to: