Chapter 6 - Claims and Returns

Part A: Claims

Part A: Claims

6.1 What charities can claim

6.1.1 A charity can claim UK basic rate tax on Gift Aid donations made by individuals on or after 6 April 2000, whatever the amount of the donation.

6.1.2 A charity cannot claim repayment of basic rate tax on Gift Aid donations made by companies and other corporate bodies on or after 1 April 2000.

No donations from companies should be included when a charity claims back tax from HM Revenue & Customs (HMRC)
Charities on an R68 Claim form.

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 for the year x amount of Gift Aid donations
100 – basic rate

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:

  • net bank/building society interest
  • net interest from Government stocks
  • income from wayleaves (eg sums paid by a utility company for the right to put cables across a piece of land)
  • royalties
  • other types of annual payment
  • estate income
  • discretionary trust income


6.1.5 HMRC Charities can only repay UK tax. Foreign tax can only be repaid by the Revenue department of the country in question. HMRC can supply you with claim forms for most major foreign Revenue departments. Charities should telephone 0115 974 1947 or Fax 0115 974 1950 or write to:

HMRC CAR Residency
Fitzroy House
PO Box 46
Nottingham
NG2 1BD

stating the country and type of form you require.

6.2 Gift Aid Transitional Relief

6.2.1 Charities and Community Amateur Sports Clubs (CASCs) making Gift Aid repayment claims will be entitled to a transitional relief relating to qualifying Gift Aid donations made in the tax years 2008-09 to 2010-11. The transitional relief will be paid by HMRC when a claim for repayment of tax made within specific timescales is allowed.

6.2.2 The relief will apply to Gift Aid repayment claims made on qualifying donations made between 6 April 2008 and 5 April 2011.

6.2.3 Charities and CASCs will 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 will be 2 per cent and will be applied to qualifying donations made in the tax years 2008-09, 2009-10 and 2010-11.

6.2.4 The relief will be 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 will be the difference between that figure and the amount of the donation grossed up at the basic rate. The amount of the relief due will be 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:

  • Charitable Trusts will receive payment of the Gift Aid transitional relief for up to two years after the end of the tax year to which the R68 Claim form relates
  • Charitable Companies and CASCs will receive payment of the Gift Aid transitional relief for up to two years after the end of the accounting period to which the R68 Claim form relates

6.3 Authorised signatories

6.3.1 HMRC Charities will repay claims only if they are signed by an authorised signatory of the charity, who has been authorised to do so, on a special nominee form.

6.3.2 Two officials of the charity, (ie either trustees of the charity; directors of the charity; or members of the committee responsible for the running of the charity’s affairs) must sign the nomination form. A charity can authorise more than one nominated signatory but each nomination must be made on a separate form.

6.3.3 The person nominated as authorised signatory does not have to be an official of the charity. A charity official can, however, be an authorised signatory and can also be one of the counter signatories on his own nomination.

6.3.4 There are three forms available to enable charities to notify HMRC of a signatory authorised to make claims on their behalf, as follows:

6.3.5 A new or amended nomination must be made on an official form but if a signatory is withdrawn separate written notification of the withdrawal must be made, by the charity, to HMRC. To avoid delay in processing repayments, any change in the authorised nominee (and, where appropriate a written notice of withdrawal of an obsolete signatory) should be sent to HMRC before submitting a claim.

6.3.6 The declaration on Page 2 of the R68 Claim form must be signed by an authorised signatory of the charity as notified on form ChN1, ChN2 or ChN2A. The person signing that claim confirms that the claim is correct, that the charity’s income has been applied to charitable purposes only and is exempt from tax.

6.3.7 The ultimate responsibility for the accuracy and validity of any claim made in their name will remain with the charity concerned. Charity officials should therefore give careful consideration as to the suitability of any person or body they authorise to act on their behalf.

6.4 How to make a repayment claim

6.4.1 Unless the charity receives a Self Assessment tax return, all claims must be made on form R68 Claim form together with schedules of donations or other income. Specimens of these forms can be found at Appendix B. The main R68 Claim form must be signed by the authorised official of the charity.

6.4.2 The following forms should be used when making a repayment claim:


6.4.3 Before making a first claim for repayment, a charity will need to register its existence with HMRC Charities. Details of what needs to be done can be found in Chapter 2.

6.4.4 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 issued. If a charity does want a separate subsidiary reference for this reason, documentary evidence relating to the appeal should be sent to HMRC Charities.

Example

A hospital charity launches an appeal to save one wing of the hospital. It wishes to keep the fund separate from its normal fund. It already has the reference number XR 00000. It sends to HMRC Charities literature relating to the appeal and requests a separate subsidiary reference number. Following acceptance of the appeal fund as charitable, HMRC Charities allots the appeal fund the reference number XR00000/1. Any claims under that reference will be paid to the appeal fund account.

6.4.5 The total of tax deducted from ‘Other income’ of the type detailed in paragraph 6.1.4 (above) must be entered in box D of R68 Claim. In addition, details of the income must be entered on form R68 Other Income. A separate R68 Other Income must be completed where the income relates to more than one tax year. This schedule must be sent with R68 Claim.

6.4.6 The total Gift Aid donations received up to 5 April 2008 must be entered in box A on Page 2 of the form R68 Claim. The tax being claimed on these total donations must be entered in Box A1.

6.4.7 The total Gift Aid donations received from 6 April 2008 must be entered in box B on Page 2 of the R68 Claim form. The tax being claimed on these total donations must be entered in Box B1.

6.4.8 The total tax claimed in Box A1 and Box B1 should be added together and entered in Box C on Page 2 of the R68 Claim form. A separate R68 Gift Aid schedule an R68 Other income schedule must be completed for each accounting period of the Charity or CASC, and only donations made in that accounting period entered on each R68 schedule.

If a Charity is a Trust a separate R68 Gift Aid schedule and R68 Other income schedule must be completed for each tax year of the Charity and only donations made in that tax year entered on each R68 schedule.

6.4.9 The total of the completed boxes C and D should be entered in Box E on Page 2 of the R68 (Claim).

6.4.10 The R68 Claim and accompanying R68 Gift Aid schedules should all be checked for arithmetic errors before being sent to HMRC Charities.

6.4.11 Please ensure that all the details required on Page 2 of the R68 Claim form are also completed. The repayment will be sent to the authorised official who signs the declaration (see Section 6.3 above regarding the necessity of supplying details of the authorised official of the charity) at the correspondence address entered at the top of Page 1 of R68 Claim unless Option 2 Payment by cheque on Page 2 is completed. The authorised official of the charity may nominate another person to receive the repayment by entering their name and address on Page 2 of the R68 Claim. The Nominee box should only be ticked if the repayment is to be paid into the nominee’s bank account.

6.4.12 Please ensure you make and keep a copy of the claim form and schedules before sending the claim to HMRC Charities.

6.4.13 Only correspondence directly relating to the claim should be sent with the R68 Claim form. Any other correspondence should be sent in a separate envelope.

6.4.14 Repayments will be made directly into a Charity’s or CASC’s Bank or Building Society account by the Bank Automated Clearing System (BACS). This means that the repayment is received more quickly and securely and a cheque will not have to be paid into a Bank or Building Society account. Fill in the Payment details section on page 2 of the R68 Claim with details of the Charity’s or CASCs Bank or Building Society account. If you do not complete the BACS details, a cheque payable to the Charity or CASC will be sent to the authorised official who made the repayment claim.

6.4.15 When HMRC Charities is satisfied with the claim we will repay the sum claimed to the charity, CASC or nominee. If there is a simple error in the sum claimed, we will amend the claim and repay the correct amount. We will write to the charity explaining the reasons why the claim has been corrected.

6.4.16 HMRC Charities aims to repay 97 per cent of fully documented second and subsequent claims within 15 working days of receipt. The first repayment claim made by a Charity or CASC will take longer to process.

6.5 Time limit for making claims

6.5.1 Until 31 March 2010, claims by a charitable trust must be made no later than five years after 31 January following the end of the tax year to which the claim relates.

After 31 March 2010, claims by a charitable trust must be made no later than four years after the end of the tax year to which the claim relates.

6.5.2 Until 31 March 2010, claims by CASCs and charitable companies must be made no later than six years after the end of the accounting period to which the claim relates.

After 31 March 2010, claims by CASCs and charitable companies must be made no later than four years after the end of the accounting period to which the claim relates.

6.5.3 There are different time limits for charities and CASCs to receive the Gift Aid Transitional Relief that apply to qualifying donations made in the tax years 2008-09, 2009-10 and 2010-11 (see section 6.2 above).

6.6 Claims: other points to note

6.6.1 Claims can be made in respect of donations received in any period in any tax year, or for the whole of one or more accounting years. Where a claim covers more than one accounting year, separate R68 Gift Aid schedules need to be completed and sent for each accounting year.

6.6.2 Where a charity has not maintained an auditable recording of a telephone Gift Aid declaration and so needs to issue a statement to the donor to validate the declaration (see paragraphs 3.12.2 and 3.13.1), a claim can only be made after the written copy has been sent to the donor.

6.6.3 Claims can be submitted as frequently as a charity wants. Claims may not be repaid, 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 Charities can submit substitute R68 Gift Aid schedules or R68 Other income schedules with the R68 claim form if they wish. These substitute schedules must contain the same information and be in the same format as HMRC’s R68 Gift Aid schedule and R68 Other income schedule.

6.6.5 Repayment interest is often due and payable on a Gift Aid claim. Interest is calculated as follows:

  • for a Charitable Trust - from 1 February next following the year of assessment to which the income relates
  • for a Charitable Company or CASC - from the day after the end of the accounting period to which the income relates

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 BACS payment or a single cheque to the Charity or CASC.

6.6.6 Please tell HMRC Charities 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.

Sponsored events

6.6.7 Charities that organise sponsored events are able to include the pledged donations in Gift Aid if the donors (not the participators) complete Gift Aid declarations. These declarations can be incorporated into the sponsor forms – please see our 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 schedule R68 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 6.00 pm, Monday to Friday.

6.6.11 A separate Gift Aid claim should be submitted as soon as possible after the event. This should only include sponsors Gift Aid donations from the event.

6.6.12 The claim for the event should be accompanied by a covering note explaining
that it relates to the event.

6.6.13 Individual donor details do not need to be included on the R68 Gift Aid Schedule. Instead, the schedule should list the amounts on each individual participator’s sponsor form where Gift Aid declarations have been made. Each entry on the R68 Gift Aid Schedule should identify the sponsor sheet in question, either by use of the participator’s name or by use of an individual reference. The entry in the 'Total donation(s) received' column should be the total of amounts on the sponsor sheet in respect of which Gift Aid declarations have been obtained.

6.6.14 Charities using the modified claims basis must retain the original sponsor sheets and be able to produce them on demand in the event of HMRC Charities wanting to audit their Gift Aid claim. This is because the sponsor forms contain the donors’ declarations and form part of the audit trail connecting the payments and declarations to the charities’ claims.

Aggregated claim

6.6.15 Since 12 March 2008 Charities and CASCs can add together small donations that they receive from multiple donors on the R68 Gift Aid Schedule within certain limits.

The limits are:

  • each individual donation within the aggregated amount must not be more than £10
  • the aggregated amount on each line on the R68 schedule cannot exceed £500

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 and ‘audit trail’ information that support the amounts listed on the schedule.

6.6.17 The adding together of small donations cannot be applied to:

  • donations larger than £10
  • all collections where there are no Gift Aid declarations
  • donations associated with admissions to charity visitor attractions
  • the arrangements for sponsored events (above)

6.7 Tax Credit Transitional Relief

6.7.1 Prior to 6 April 1999 charities could claim back the tax credit attached to dividends and distributions they received from UK companies. Tax credits are no longer payable to charities on dividends paid to them by UK companies on or after 6 April 1999.

6.7.2 From 6 April 1999, however, charities could claim Tax Credit Transitional Relief (TCTR). Charities could claim this relief on dividends and distributions paid to them by UK companies until 5 April 2004. Further details on this relief can be found in Technical Annex V.

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