The essential steps to avoiding unclaimed Gift Aid payments

What are the challenges around Gift Aid payments?

Research by the Charities Aid Foundation shows that just 1 in 2 donors (55%) claimed Gift Aid when they gave money to charity last year. While this number is up on previous years, Gift Aid remains a major untapped resource, with an estimated £560 million going unclaimed by UK charities every year. That’s a lot of money to be missing out on.

Understanding the difficulties facing donors and charities

There are two sides to this coin. As the above suggests, the first is linked to a lack of awareness and uptake among donors. Notably, this includes those that fall into a higher tax bracket, with a fifth of those earning over £50,000 failing to claim Gift Aid on their donations. It isn’t just charities that lose out here. Higher rate taxpayers who complete a Self-Assessment can claim back the surplus tax relief due on Gift Aid payments (e.g. for a 40% taxpayer, £2.50 of a £10 donation will go to the charity and £2.50 to the donor).

The second challenge is likely tied to administrative fallout, and the difficulties charities face in obtaining, managing and processing valid Gift Aid claims. A feat of data management, staying on top of Gift Aid often means processing thousands of individual claim with HMRC and making sure you have a valid declaration, accurate donor records, and financial information to back up each one.

Without the right software and tools, this process (not to mention the thought of navigating HMRC’s online system) can feel more than a little overwhelming. It is also very time-consuming. When it’s done manually, keeping donor declarations up-to-date and processing Gift Aid claims is a task that involves one too many Excel spreadsheets and takes up huge amounts of working hours.

Claiming Gift Aid payments doesn’t have to be difficult

When team capacity is stretched, it’s easy to see how Gift Aid management can slip. But with service demands rising and public donations predicted to fall, that extra 25% really does make a difference. No organisation can afford not to claim Gift Aid. The trick is to streamline the process and make it as simple and efficient as you possibly can.

How software suppliers can help support claims for Gift Aid payments

In today’s digital world, there are a number of software solutions that have been designed to help you manage, process and submit regular Gift Aid payment claims.  

An HMRC approved supplier, Access Charity CRM is one of them. We know how much Gift Aid means to charities, and that’s why we’ve made it an integral part of our CRM. Say goodbye to awkward Excel spreadsheets and hours of administration. With the right software in-house, it’s easy to:

• Log, record and update a donor’s Gift Aid declaration and status
• Keep track of incoming eligible donations
• Pull reports to identify gaps and track Gift Aid income
• Submit online claims (with cross-checked and validated data)

It may sound a little too good to be true, but it isn’t. A number of charities are already using Access Charity CRM to claim back Gift Aid, with one charity recouping almost £5,000 in previously undeclared Gift Aid payments, while another claimed back almost £25,000.

For Garden Organic, a charity that promotes the benefits of organic growing, our software meant the team was able to identify and process eligible payments that had not been claimed routinely in the previous four years. As Richard Harrington, their Head of Membership explains:

"The Access Group helped us identify several ways that we could make our Gift Aid processing more efficient and robust. The required work to claim these was little more than a regular administrative exercise and the results were immediate.

“This income has helped us to inspire more people to take up composting, grow their own organic food and learn how to better care for our environment and their gardens. It’s helped us promote further the very essence of our work – encouraging sustainable organic growing practices.”

That’s the bottom line. Not only does specialist Gift Aid software save you time, it also makes you money. An important source of unrestricted income, Gift Aid can be used to fund essential core costs as well as supporting projects that help advance your mission.

The steps that can be taken to help avoid unclaimed Gift Aid payments

As well as investing in specialist software, there are other steps your charity can take to help make sure it’s ready to make the most of Gift Aid.

Step 1: Educate your donors

It’s not just your team that needs to understand the importance of Gift Aid. Your donors do too. It’s important to provide clear information about what Gift Aid is and how it benefits charities and donors alike. You can do this on your website, through social media, in emails and newsletters, as well as through one-to-one interactions, like event registration.

Step 2: Plug the gap in Gift Aid declarations

Every Gift Aid claim must be backed up by a declaration confirming that your donor is a UK taxpayer and that they’re happy for your organisation to claim Gift Aid. No one likes admin. So, make this process as quick and easy as possible by providing clear instructions, online and prefilled forms (e.g. with the donor’s name and address already filled out) wherever you can.

Step 3: Make sure you submit regular claims

Staying on top of Gift Aid payments means submitting claims regularly and complying with HMRC deadlines. Build the process into your workflow, and automate tasks using specialist software. You’ll soon see the fruits of your labour. HMRC usually processes Gift Aid claims within a few weeks, and the payments will soon make their way into your charity’s bank account.

Step 4: Do a Gift Aid payment ‘sweep’

Don’t forget. If your charity has unclaimed Gift Aid payments from previous donations, you’ve got four years to get them back. So, why not take this chance to do a Gift Aid sweep and fill the gaps in historic claims? A good charity CRM will make it easy to pull the reports and access this information, and you might be surprised by the size of the golden nugget you find.  

Step 5: Invest in the tools you need

We’ve said it before, and we’ll say it again: make sure that you and your team have the tools you need. There is no benefit to processing claims manually if you don’t have to. Specialist software makes it quick and easy to stay on top of donor declarations and records, automate workstreams and processes, and submit your Gift Aid declarations online.

Find out more about maximising your Gift Aid payments

It doesn’t matter what size of organisation you are, every pound counts. Gift Aid is the perfect way to maximise the impact of individual donations and bring essential funds into your organisation. Don’t miss out.

If you want to find out more about Gift Aid eligibility, processes, and claims, check out our handy Not For Profit guide. If you’re interested about how Access can help you make the most of your Gift Aid payments, why not get in touch? Our expert team is ready and waiting to help.