GIFT AID> Can we get tax back for volunteers expenses unclaimed?

Date: Mon, 24 Feb 2003 14:31:51 +0000
From: Vicki Bradley

I don't think you will be able to claim Gift Aid on unclaimed expenses.

The volunteer would have to be a tax payer (Income of Capital Gains) and
have paid tax on the donation. So unless these two criteria are met it is
my understanding you cannot claim Gift Aid on the donation (unclaimed
expenses).

Hope this is helpful.

Vicki

Mrs Vicki Bradley
Membership Development Officer
Friends of the Earth Scotland
72 Newhaven Road
Edinburgh
EH6 5QG
Tel: 0131 554 9977
Fax: 0131 554 8656
email: [email]vbradley@foe-scotland.org.uk[/email]
web: [url]www.foe-scotland.org.uk[/url]

Date: Mon, 24 Feb 2003 11:03:31 -0000
From: Larry Boyd

We have considered this since we have lots of volunteers and most do
not claim expenses.

I re-read the Inland Revenue regulations. (available on their website)
Although the Inland Revenue does not deal with this specifically, it
seems clear that you must have a 'Chinese wall' between the payment of
expenses to volunteers and gifts by volunteers to the charity. You
could inform volunteers that they could claim expenses and later in an
unconnected altruistic gesture, make a similar donation to the charity
which could be eligible for Gift Aid. You could not get volunteers to
sign over expenses with a Gift Aid declaration.

Gift Aid is always worth taking because the administration is
negligible. We ask volunteer members to make a gift aid declaration
when they pay a £2 renewal. Every bit helps.

I would be overjoyed if someone proved me wrong as it could add
thousands to my bottom line.

Chapter and verse from the Inland Revenue follows.

++++++++++++++
Larry Boyd
Tools for Self Reliance
United Kingdom
Website [url]www.tfsr.org[/url]
++++++++++++++++
Practical help for practical people

Relevant points from the Inland Revenue regulations include:

3.35.1 Gift Aid only applies to unfettered gifts to a charity for its
charitable purposes.

3.8.1 Donors must donate their own money. The donation can be made by
cash, cheque, direct debit, credit card, debit card, postal order or
standing order.

3.8.3 A donation must be a payment of a sum of money. A donation
cannot be made in kind, by loan waiver or by debt/loan conversion.

SECTION D: BENEFITS RECEIVED BY DONORS
3.25 Introduction
3.25.1 Charities may wish to give a token of appreciation by way of a
thank you to their donors for their donations. Modest benefits received in
consequence of making a donation will not stop the donation from qualifying
as a Gift Aid donation, provided
their value does not exceed certain limits. If a charity wishes to provide
benefits to
its donors * for example, as part of a membership scheme * it should
consider whether
the benefits it intends to provide fall within the limits in the donor
benefit rules
given below. If the benefits exceed the limits, then the donation cannot
qualify under the
Gift Aid Scheme.

3.25.2 In order to decide whether a donation can qualify under the
Gift Aid Scheme, the charity needs to determine:

• whether the donor, or a person connected with the donor, receives
any benefits in consequence of making the donation, other than of the type
detailed
in Section 3.27 below, which can be ignored.
• if benefits are received, whether their value exceeds the limits in the donor
benefit rules.

3.26 What is a benefit?
3.26.1 A benefit is:
• any item or service
• provided by the charity or a third party
• to the donor or a person connected with the donor
• in consequence of making of the donation.

3.28 The donor benefit rules
3.28.1 The donor benefit rules contain two limits for the value of the
benefits that a donor, or a person connected with the donor, may receive in
consequence of making a donation. If the value of the benefits received
exceeds either of these limits, the
donation will not qualify as a Gift Aid donation. A donation will not
qualify if:
• the value of the benefits exceeds the limits in the table at
paragraph 3.29.1 (the relevant value test), or
• the value of the benefits plus the value of any benefits received in
consequence of any Gift Aid donations made by the same donor to the same
charity
earlier in the same tax year exceeds £250 (the aggregate value test).

3.29 The relevant value test
3.29.1 The limits for the relevant value test are:
Amount of donation Value of benefits
£0-100 25% of the donation
£101-1,000 £25
£1001+ 2.5% of the donation

end

Date: Mon, 24 Feb 2003 10:14:39 -0000
From: Roger F Page

Perhaps a little pedantic, but if the volunteers are donating expenses =
paid to them by the charity, they are not making a donation from taxed =
income which is the whole point of Giftaid. If there is a direct link =
between the unclaimed expenses and the donation, I think you would be =
skating on thin ice in the event of a Revenue inquiry.=20

Roger F Page
Director of Finance
Ty Hafan The Children's Hospice in Wales

Tel 01446 739993

Date: Fri, 21 Feb 2003 15:42:21 -0000
From: Wendy Ahl

I'm not a whizz at Gift Aid but I would've thought that they would have to
claim the money and give it back to you as a donation for it to qualify for
Gift Aid.

Wendy
---------------------------------------------------------
Mrs Wendy Ahl MInstF
Community Fundraiser
St Peter and St James Hospice and Continuing Care Centre, North Common Road,
North Chailey, Lewes, East Sussex, BN8 4ED
Tel: 01444 471598 Fax: 01444 471088 Charity no: 1056114
E-mail: [email]wendy@stpeter-stjames.org.uk[/email] Website: [url]www.stpeter-stjames.org.uk[/url]

Date: Fri, 21 Feb 2003 15:13:36 +0000
From: Mike Wade

Helen asked re claiming Gift Aid against unclaimed voluneer's expenses. In
effect, what you are proposing is that you pay your volunteers expenses,
and the volunteer decides to make a donation to the charity of the same
amount. It's a bit like in the old days, someone having a covenant against
the royalties on a book they had written. Administratively, you would have
to establish a clear audit trail to show that the above had happened, with
a donation record against the named individual that you were claiming the
Gift Aid against. I would recommend that in this case signed expenses
records are also kept, with receipts, in case you were challenged at Inland
Revenue audit.

So - should be ok, by my understanding. You may want to run it by your
local Inland Revenue contact to cover yourselves however.
Mike

__________________________

Mike Wade
Head of Supporter Development, Oxfam GB

tel: (0)1865 313919
fax: (0)1865 313979
email: [email]mwade@oxfam.org.uk[/email]

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