Gift Aid claims to move to online processing

By Kevin Russell | 11 December 2012

HMRC

In a move described by some as the biggest change to Gift Aid since it was introduced, HMRC have announced that they will move the Gift Aid claim process to an online system with effect from April 2013. The existing claim Form R68i will be withdrawn. 

Besides Gift Aid proper, the new system will also be the means by which charities will claim top up payments under the new Gift Aid Small Donations Scheme. The key issue that charities need to be aware of is that the new claims system will require more information than previously. So, for example, it will be necessary to provide the name and full address of each donor in every Gift Aid claim. 

Charities Online will facilitate Gift Aid reclaims as well as claims for other charity tax reliefs. The system will offer claimants three options:

 

  1. An online claim form, accessed through the HMRC website. This will provide:

 

  • A maximum of 1,000 lines of donations, per form.
  • Unlimited number of claims, even if made on the same day.
  • Cut and paste from popular spreadsheet software available
  • A downloadable spreadsheet template available.

 

It will be important that the form is completed accurately. If just one entry leads to a failure to pass the HMRC automated validation criteria, the whole claim will be rejected.

 

2.       An online, externally developed, software interface

This will be required if a charity wishes to claim a Gift Aid repayment for more than 1,000 donors. It is expected that providers of charity accounting, database and CRM solutions will want to develop a module to facilitate these larger claims. At present, it is not known who will or will not provide this service and at what cost.

 

An alternative is for a charity to develop its own interface software to sit alongside existing systems. A ‘Tech Pack’ is available from www.hmrc.gov.uk/softwaredevelopers/gift-aid-repayments.htm. For details of the HMRC Software Developer Support Team who can answer questions and provide support, see www.hmrc.gov.uk/softwaredevelopers/index.htm

 

In both cases, there is a limit of 500,000 Gift Aid donations in any one day.

 

3.       A Paper Claim Form

For charities that cannot access the internet, there will be a new paper based form (a ‘ChR1’) that will replace the existing Form R68i.

 

We are expecting this form to be time consuming to complete. It will be designed to facilitate scanning by HMRC and will therefore require users to enter each character in a separate box on the form. It will also be limited to just 90 Gift Aid donations. Separate sections of the form will enable claims for other tax reliefs, including under the Gift Aid Small Donations Scheme.

 

You will not be able to claim on the R68i form, nor use photocopies of the new form. The ChR1 will be available direct from HRMC from April 2013.

 

Actions that you need to take

Make sure that your charity’s Gift Aid claims are made right up to date as of March 2013. That way, you will be able to capture the enhanced data requirements at the point of donation, for all new donors. However, you will still need to make sure that you have this information in your claims system for existing donors who continue to give to your charity after March 2013.

 

Ensure that you have planned how you will submit Gift Aid claims from April 2013, according to one of the above three options.

 

Ensure that you have the right people authorised with HMRC and in place to make those claims under the new system. HMRC are sending charities a Form CDUF1(V2) to capture up to date contact and bank etc. details.

 

Ensure that you understand the new Gift Aid Small Donations Scheme so that your charity can take maximum advantage of this from the earliest opportunity.

 

Transitional Period

We are expecting HMRC to agree to a short transitional period, after March 2013, whereby they will accept R68i Forms. This is to give charities a little more time, if they need, to adjust their systems to the new arrangements. To date, no commitment has been made as to how long this will be. Staff presently processing these forms, are to be redeployed elsewhere in HMRC and therefore the transitional period is expected to be short.

Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 

comments:

There are currently no comments on this post

leave a comment:

Your comment will have to be approved by a site administrator before it is shown on the site so please be patient.