Gift Aid and Contactless Donations

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February 27, 2020

Not an Inspiring Start

Gift Aid is so boring, but so important.  It’s like the other evil twin of VAT!  It makes such a difference, but fundamentally it’s so dull!  So apologies that you have to read about it, and to be honest I’m a bit sorry for myself that I have to write about it, but hey ho, I’ll try to make it as interesting as I can, and if you can get lots of extra income for your charity then at least it’ll be worth it.

When I was at the Charties Aid Foundation we spent a long time trying to get the government to modernise Gift Aid, and then we spent a long time trying to work out if there was a way to modernise it, without the government having to do anything.  I’m afraid neither really got anywhere, so apart from a bit of tinkering around the edges with online Gift Aid reclaim, and the small donation scheme, it’s much the same as it always was.  

The Problem

In order to claim Gift Aid you need:

  1. a declaration by the donor with suitable wording
  2. their title
  3. the first and last names
  4. their house name or number
  5. the postcode
  6. the amount of the donation
  7. the date of the donation 

Unfortunately the way that all contactless payments are secured means that you don’t get access to any of this information when the transaction is being processed.  So if you’re going to get it, then the donor needs to give it to you somehow.  For most contactless donation products this is too complex to collect without making the beautifully frictionless experience of a contactless donation, much less straightforward.

The Solution / Advert

However our CollecTin More, in its premium mode, gives the option to request this info after the donation has been made.  And then the really clever bit, is that it asks donors to sign an enduring declaration (add gift aid to every donation I make to this charity from now) and remembers enough unique info from their card, so that it can reconginse when the same card is used again and just asks the donor if they’d like to add Gift Aid, without them needing  to enter any info again.  You can then download the Gift Aid declarations in the HMRC specified format, so that they can be uploaded straight into the HMRC Charties Online system to be reclaimed.

The Good News (mostly for small charities)

Whilst I may have been a bit disparaging about the HMRC small donation scheme earlier, the good news is that since April 2019, charities are able to use it for contactless donations.  This means that eligible charities can claim upto £2,000 a year in Gift Aid on contactless and cash donations, without any individual donor declarations

The Future

Various attempts are still being made to make Gift Aid work better for the digital age.  Some involve tying Gift Aid declarations to bank accounts, or bank cards. Other suggest a huge national database of Gift Aid declarations.  However as far as I’m aware none are mainstream yet, though I’d be keen to hear about any that look like they are getting traction.

So it is possible to do Gift Aid on contactless donations, and well worth making use of the whole small donation scheme if you can.  Do get in touch if you’d like to discuss it further, though not if you’re already feeling drowsy.

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