The top 5 Errors made by Charities when making tax claims

HMRC Charities Outreach Team has revealed the most common errors made by charities when making tax claims.

1. Wrong authorised official/agent/nominee submitting the claim

Charities may change personnel or appoint a new agent/nominee, but fail to complete a change of details form (ChV1) to let HMRC know.

2. Claiming excessive GASDS (Gift Aid Small Donations Scheme)

Although there is an annual limit of £5,000 up to 5 April 2016 and £8,000 from 6 April 2016, charities often include greater amounts on their claims. It would seem that the confusion arises when a charity enters the total donation collected rather than the total eligible amount. To counter this, charities should only enter the maximum amount rather than the actual amount collected.

3. Out of date GASDS claims

The Gift Aid Small Donation Scheme runs tax year to tax year, and charities can only claim back for the previous two years – whereas Gift Aid runs from accounting periods and charities can claim for the previous four years.

4. Errors completing a paper claim form

As the form is scanned and read electronically, charities are advised not to put lines through boxes or ‘N/A’ and should leave them blank instead.

5. Additional correspondence is sometimes included

The guidance notes ask charities not include additional correspondence

The outreach team also revealed that the main queries received from charities related to:

  • Help completing application and change of details forms
  • Chasing progress of claims
  • Advice on the Gift Aid Small Donations Scheme (GASDS)
  • Advice on ‘eligible’ donations
  • Whether charities need to complete a Corporation Tax (CT) return

If you have any questions or queries concerning Gift Aid, Gift Aid Small Donation Scheme, Corporation Tax or any other subject please contact our team.

The full feedback was published by the Charity Tax Group and can be read here.

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