According to Leonardo da Vinci, “simplicity is the ultimate sophistication”. Many charities use Gift Aid management systems that are clunky, cumbersome and not fit for purpose. For other charities, a simple effective system for managing Gift Aid is completely non-existent.

Volunteers are indispensable to charities. However their support is often based on their availability which is not always guaranteed. When charities rely unduly on volunteers, this affects the frequency of Gift Aid claims and ultimately contributes to the annual £600 million ‘leak’!

For instance, donations received by bank transfer create time-consuming admin tasks with regard to Gift Aid. Bank statements need to be downloaded, analysed and matched against existing Gift Aid declarations before claims can be submitted.

HMRC periodically select a random number of charities for audit to ensure that the Gift Aid Scheme is being used properly and that any claims made are accurate. Where a charity has not maintained an auditable record of Gift Aid declarations, or where those records are insufficient to show that the donor made the declaration, a charity will then be liable to pay back to HMRC all Gift Aid received in relation to those donations. This will include interest and possibly penalties.