HMRC Grant in Aid funding guidance

Introduction

HMRC Aims

We are in the second year of our multi year funding commitment. In two years time we would expect that Her Majesty’s Revenue & Customs (HMRC) GIA funding programme will have contributed to:

  • Helping HMRC to increase take up of Tax Credits and other HMRC products
  • Helping significantly more hard to reach and vulnerable customers to get the right entitlements and pay the right amount of tax
  • Improving the customer experience for those hard to reach and vulnerable customers
  • Helping HMRC to gain a better understanding of those customers who use the third sector
  • Helping HMRC to identify and reduce barriers to our hard to reach and vulnerable customers getting the right entitlements, paying the right amount of tax and having a customer experience that encourages direct contact with HMRC.

In 2007, HMRC made available £2 million per annum for the next three financial years aimed at funding Voluntary and Community Sector organisations. These funds were aimed at helping with the costs of activity contributing to HMRC key aims, outcomes and priorities. For 2007/08 we made 47 awards, 11 of which were for multi year funded projects.

From 2008/09 HMRC are widening the scope of their funding programme to include third sector organisations (TSOs), encompassing voluntary and community organisations, charities, social enterprises, cooperatives and mutuals both large and small.

HMRC has now committed to £2m for 2010/11 therefore the funding available taking out the funds we have already committed will be as follows:

  • £1.5 million for 2008/09
  • £1.75 million for 2009/10
  • £2 million for 2010/11

As a guide only and not as criteria for eligibility, we expect bids to fall in the following three funding brackets:

  • Up to around £20,000 per annum – from locally based or smaller organisations.
  • Up to around £80,000 per annum – for more significant projects involving work on a wider geographical scale.
  • Up to around £250,000 per annum – for a major programme of work on a National scale.

We don’t expect bidders to make more than 1 funding application and will only consider additional applications in highly exceptional circumstances, for example where there is a partnership application involving 2 or more bidders.

We may decide to offer partial funding for some projects. Where that happens we will approach you to revise your proposals.

Our Strategic Outcomes and Priorities

You will need to focus your planned activity very clearly on one or more of HMRC strategic outcomes and priorities in order to have a chance to secure your funding requirements.

The strategic outcomes and priorities (PDF 54K) identify the HMRC key customer groups and products we would expect you to focus on. We welcome projects that take a holistic approach and cover more than one of those customer groups and products. The activity in respect of each customer group and for each HMRC product must be specified clearly in your Pre-bid application.

Eligibility Criteria

  • To qualify for funding from HMRC grant in aid programme you need to satisfy us that your organisation is eligible i.e. being non-governmental organisations which are value-driven and which principally reinvest their surpluses to further social, environmental or cultural objectives.
  • More detail on this can be found in the VCS2 Pre- bid application (PDF 189K). You will need to satisfy the criteria to be eligible for a grant in aid payment from HMRC. We may ask you to provide information to support your eligibility.

Timetable

The timetable for allocation of funds for 2008/09 will be;

  • Pre Bid process – five weeks beginning on 12 November 2007 and ending on 24 December 2007 to complete a pre bid application
  • Assessment of bids by HMRC – we are hoping to assess bids and make notifications within a six week timetable after the closing date for pre bids. At the end of that period we will notify bidders as to whether they have been successful or not with their bids.
  • Questionnaire completion – successful bidders will then have a four week period to complete and submit a questionnaire. It is hoped that on that basis bidders will be formally notified that they have funding for their projects by mid March. If we have part funded your bid you will need to submit a revised VCS2 Pre- bid application (PDF 189K) with your VCS3 questionnaire (PDF 139K) within the four week timetable.
  • We aim to start the 2009/10 round for bidders in October 2008 which will provide an even longer period for discussions, bidding and assessing.

The Application Process

For 2008/09 we will be operating a two stage application process.

  • The first stage will involve the completion of a Word version of the VCS2 Pre- bid application (PDF 189K). This can only be obtained by emailing Hazel Kilpatrick or contacting her on 0191 2247416. Only Pre- bid applications received by 24 December 2007 will be assessed and scored. We will not consider late bids.
  • The aim of this part of the exercise is to collate sufficient information for HMRC to score and select the best bids that meet HMRC strategic outcomes and priorities.
  • Once that scoring process has been completed we will notify bidders as to whether they have been successful or not. Those who have been successful at the pre bid stage will then be asked to complete a VCS3 questionnaire (PDF 139K).
  • The aim of the questionnaire will be to gather information that we will require in order to monitor and evaluate the success of the project and to agree arrangements for payment.
  • Only questionnaires received by the deadline to be notified at a later stage will be given formal confirmation of funding. Late questionnaires will not qualify for funding.

How will we score the bids?

The pre bids will be assessed and scored by a panel of HMRC representatives based on specific criteria linked directly to:-

  • the strategic outcomes
  • the priorities
  • the key customer groups
  • the key product groups

We will also be looking for evidence of value for money and the ability of the organisation to express very clearly how achievement of key outputs and outcomes will be delivered and demonstrated. It is essential that you are able to set out very clearly the outcomes you are looking to achieve and how they are linked to HMRC strategic outcomes and priorities.

Allocation of funds

  • The terms for funding allocation are set out in a Grant in Aid Agreement (PDF 114K). You will need to read, check and sign this Agreement to secure funding. We will send successful bidders a HMRC signed paper copy of the Agreement at the end of the pre bid process which will need to be signed and returned immediately.
  • Funds are normally released after the relevant costs have been incurred and paid out by the organisation.
  • Once a formal offer of GIA funds has been made and accepted, the beneficiary organisation may apply to HMRC for payment once it has incurred costs for the agreed purpose.
  • The invoice for payment will need to set out clearly;
    • what costs were incurred
    • what the costs were incurred on
    • when the costs were incurred
  • You should set out the breakdown on your invoice covering the cost codes shown on the Expenditure Profile (PDF 78K). This will help both you and HMRC to assess whether costs are being incurred as anticipated. If there is a wide divergence between your original expenditure profile and the invoicing profile we would expect an explanation for the change.
  • HMRC will consider advanced payments where a sound financial case is made for payments on that basis and where HMRC considers it to be appropriate and necessary to allocate funds on that basis. Agreement of the funding arrangements will be made on completion of the bidding process.

Full Cost Recovery

The VCS2 Pre- bid application (PDF 189K), VCS3 questionnaire (PDF 139K) and Expenditure Profile (PDF 78K) forms a financial breakdown of the costs you will incur. HMRC require that such data represents the full costs of your project and it is essential that relevant overhead costs are included in your bid.

Such overhead costs relate to the element of your core management, administration and support function costs that will be incurred in meeting the objectives of the funded activity.

Overhead costs should be allocated in a simple but fair and transparent way and not on an arbitrary percentage basis and may be recovered only once from funders.

This year we are introducing Cost Codes required to complete the Expenditure Profile. All of your project costs, including salaries, should breakdown and map against the Cost Codes.

For example if you are employing an advice worker who will undertake outreach activity, is involved in providing organisation based advice / advocacy and will also be involved in the evaluation of the project, then you should breakdown the salary proportionately to the time they are involved against the appropriate cost codes.

If that advice worker is solely involved in outreach activity, then all salary costs for that individual should be recorded under the Outreach Activity cost code.

The Cost Codes are as follows:

  1. Outreach Activity – ie. all costs including salaries, hire of premises etc. for activity in the community such as holding Seminars / Road Shows and Workshops – generally to raise awareness
  2. Telephone Helplines – all salaries and other costs associated with running a helpline
  3. Advice / Advocacy – this should include costs for providing organisation based advice and support, generally one to one individual focused activity either over the telephone or face-to-face – it is anticipated this will primarily be salary costs
  4. Training – all costs for internal training, or for training events to be delivered to other Third Sector organisations to develop capacity
  5. Production / Distribution of Guidance – leaflets / booklets etc
  6. Marketing / Advertising – radio broadcasts / adverts / press / flyers
  7. eGuidance – Web based activity, updating websites, SMS etc
  8. Project Evaluation
  9. Professional Fees
  10. Equipment
  11. Overhead Costs – Office Salaries
  12. Overhead Costs – accommodation and other running costs

How will we be monitoring and evaluating projects?

  • HMRC recognises that a one size fits all approach to monitoring and evaluating of projects is inappropriate and that an appropriate risk assessment should influence how we approach this part of the process.
  • HMRC also recognises a need for proper proportionality in carrying out any monitoring and evaluating of projects and will adopt a sensible light touch reflecting the level of risk attaching to the funds invested.
    • The key elements of our monitoring and evaluating process going forward are set out below.
    • The completed VCS2 Pre- bid application (PDF 189K) and VCS3 questionnaire (PDF 139K) which will provide details about the outputs, outcomes and the Expenditure Profile for your project will form the basis for any monitoring and evaluating activity during the life of the project.
    • Invoices which will provide us with a comparative against your Expenditure Profile (PDF 78K) and will allow HMRC and you to assess how you are progressing against your original spending profile.
    • At the beginning of the project you will be allocated an Account Manager who will be a member of the HMRC VCS Team. They are likely to arrange to visit your organisation at least once. The number of visits will depend on a number of factors including the length of the project timetable. This will be an opportunity to discuss in detail how the project is progressing, whether the key outcomes set out in the pre bid and questionnaire are being achieved and cover wider issues beyond the project. These will be planned visits agreed in advance between HMRC and the successful bidder. The visits will also provide HMRC and the funded organisation with the opportunity to share customer learning that might help both organisations future planning.
    • HMRC will also be running a small professional audit regime within the GIA funding programme. We will arrange for HMRC professional auditors to visit the premises of a small number of the organisations managing an HMRC funded GIA project to audit spend and establish that funds have been spent on the basis of the profile outlined in the questionnaire.

What reporting will we require from you?

  • For projects lasting 1 year or less we will require a VCS6 report (PDF 177K) at the end of the project which sets out clearly how the organisation has achieved the key outcomes and outputs identified at the Pre-bid application stage
  • For projects lasting more than 1 year we will require a annual report and a final report at the end of the project, these have to be completed on the VCS6 report (PDF 177K). Again this will need to focus on the key outcomes and outputs identified at the Pre-bid application stage.
  • We would also expect visits made by an HMRC Account Manager allocated to you during the lifetime of the project will form part of the reporting process.
  • It is vitally important that you are able to present clear information and data that supports delivery of the key strategic outcomes and outputs set out in your VCS2 Pre- bid application (PDF 189K).

Use of HMRC resources

We expect your organisation will already be carrying out activities that involve providing services similar to those provided by HMRC e.g. promoting, publicising or educating customers about HMRC services.

As such in 2008/09 HMRC seeks bids from organisations to carry out activity that does not require support from HMRC. We will not provide resource to check the detail in leaflets, check scripts or be involved in any level of support for the projects, beyond the monitoring and evaluating.

Only in very exceptional circumstances will we agree to provide resource for a project.

This will only be if the Pre-bid application has stated explicitly what that entails and has clearly identified and costed the resource requirement. This is so that HMRC can clearly assess the additional cost required to complete the project against value for money.

If you have any questions about this guidance, please email Hazel Kilpatrick or contact her on 0191 2247416.