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GIFT AID> Gift Aid/sponsored events

Posted on 10 March 2004 at 11:08 pm
Viewing 11 posts - 1 through 11 (of 11 total)
  • Anonymous
    10 March 2004 at 11:08 pm #1141

    Date: Tue, 27 Feb 2001 15:03:43 -0000
    From: Sophie McKane

    Positively Women has got a supporter running in this year’s London Marathon. The runner will be collecting sponsors and dividing money between PW and St Mungo’s. I’ve got a concern about Gift Aid declarations and how they will be organised. I have tried to find the answer on the inland revenue site, but this seems to be too specific a query.

    Sponsors will be given the option of either: specifying which charity they wish the money to go to and writing a cheque made payable to that charity; writing two separate cheques, one for each charity; writing a cheque or giving cash to the runner, who will then divide up the money.

    The difficulty which arises is this: suppose an individual wants to give £20, to be divided between the two charities. The donor signs a gift aid declaration and passes the cash and cheques (made payable to the runner) to the runner. The runner then pays them into his bank account, and writes a cheque to Positively Women, representing the half the money gathered from the individuals. Can Positively Women then reclaim the tax from the money given to the runner by individuals? If not, how do these events work if people are giving only cash? Presumably the runner is not expected to send
    cash to the charity.

    I don’t think that doing a gift-aid adapted sponsorship form would work in these circumstances because the money will be divided between two charities, and the form seems to relate to only one charity. Donors could sign two separate gift aid sponsorship forms, but this seems to be a bit long-winded.

    Can anyone advise me on what to do? Thanks in advance.

    Sophie McKane
    Fundraising and Communications Officer
    Positively Women
    347-349 City Road
    London, EC1V 1LR
    Tel: 020 7713 0444 Fax: 020 7713 1020
    e-mail: smckane@positivelywomen.org.uk

    Anonymous
    10 March 2004 at 11:09 pm #5251

    Date: Tue, 27 Feb 2001 16:33:16 GMT
    From: Gerry Beldon

    The message <200102271517.PAA05076@lists.dircon.co.uk>
    from Sophie McKane contains these words:

    > The difficulty which arises is this: suppose an individual wants to give
    > £20, to be divided between the two charities. The donor signs a gift aid
    > declaration and passes the cash and cheques (made payable to the runner) to
    > the runner. The runner then pays them into his bank account, and writes a
    > cheque to Positively Women, representing the half the money gathered from
    > the individuals. Can Positively Women then reclaim the tax from the money
    > given to the runner by individuals? If not, how do these events work if
    > people are giving only cash? Presumably the runner is not expected to send
    > cash to the charity.

    No, is probably the short answer! The trail is too long if the
    sponsor pays the runner first – the donation must be made by the
    taxpayer to the charity for Gift Aid to work.

    The choices are for donors to make out cheques with their gift aid
    forms (x2 if they want to split their donation) or have an agreement
    between the charities to pool the money from this runner and split
    it, after the event, according to donors’ expressed wishes. That
    way, the charity holding the account reclaims the tax and pays the
    whole amount to the other partner.

    > I don’t think that doing a gift-aid adapted sponsorship form would work in
    > these circumstances because the money will be divided between two charities,
    > and the form seems to relate to only one charity. Donors could sign two
    > separate gift aid sponsorship forms, but this seems to be a bit long-winded.

    You would have to accept that some will not be gift-aided, but cash
    is very difficult for this too.

    Cheers

    Gerry


    Gerry Beldon MICFM
    GERRY BELDON INDEPENDENT FUNDRAISING
    phone/fax : 0191 251 6720 =/= mobile : 07976 405721
    http://www.beldons.co.uk =/= [email]gerry@beldons.co.uk[/email]

    Anonymous
    10 March 2004 at 11:12 pm #5252

    Date: Tue, 27 Feb 2001 17:20:00 -0000
    From: Bill Giles

    Sophie,

    As soon as the cheques are paid to the runner you will loose entitlement to
    Gift Aid. Why not give the runner paying in slips so that they can pay the
    sponsorship straight into the charity’s account. You will need to ensure
    that the sponsorship form is a Gift Aid approved one, with all the
    appropriate boxes, and why not add an extra box to tick so that the sponsor
    can indicate on the “joint” sponsor form which organisation (either one or
    other or split between the two) he/she wishes their sponsorship to go to.
    If you don’t have this Gift Aid sponsorship form you will a) not have a
    signed Gift Aid declaration and b) not any easy audit trail to follow. It
    might even be worth having another box on the form which shows when the
    sponsorship for each sponsor was paid into the bank by the runner.

    If the extra 28 pence in the pound doesn’t appear to warrent the extra work
    involved then forget Gift Aid.

    Hope this helps.

    Bill Giles MICFM (Cert)
    Director of Fundraising
    Contact a Family
    170 Tottenham Court Road
    London, W1T 7HA
    Direct Line: 020 7380 1261 ext.242
    Switchboard: 020 7383 3555
    Fax: 020 7383 0259
    Mobile: 07967 910666
    Visit our website at http://www.cafamily.org.uk

    Anonymous
    10 March 2004 at 11:13 pm #5253

    Date: Tue, 27 Feb 2001 22:49:30 -0000
    From: Julian Smyth

    Surely an easier method would be to accept that Gift Aid declarations do not
    need to be signed? If the sponsorship form includes a field for a phone
    number, then all the sponsors (or a significant proportion) can be rung up
    and asked to confirm that they are happy for the gift to be tax effective.

    Of course, all of the above is based upon the actual value of the tax
    claimable. You have already spent a substantial amount of time thinking
    about this and sending out your question – presumably this is salary time?
    Then add on the setting up of the sponsorship forms, posting, opening,
    collating, telephoning, sending out the donor’s copy of the Declaration…..
    Unless this runner has done some very serious sponsor-raising, it’s probably
    already a loss-making exercise.

    Julian Smyth
    Principal Consultant
    ASK Associates
    Email: [email]julian@ask.org.uk[/email]
    Website: http://www.ask.org.uk
    Tel/Fax: 01494 447115
    Mobile: 07798 826105

    Anonymous
    10 March 2004 at 11:14 pm #5254

    Date: Wed, 28 Feb 2001 10:08:54 GMT
    From: Gerry Beldon

    The message <200102280805.IAA14963@lists.dircon.co.uk>
    from “fundrazor” contains these words:

    > Surely an easier method would be to accept that Gift Aid declarations do not
    > need to be signed? If the sponsorship form includes a field for a phone
    > number, then all the sponsors (or a significant proportion) can be rung up
    > and asked to confirm that they are happy for the gift to be tax effective.

    Name, address, and “Tick the Box” would probably do it, but there is
    still the question of cash donations, and also splitting donations.

    > Of course, all of the above is based upon the actual value of the tax
    > claimable. You have already spent a substantial amount of time thinking
    > about this and sending out your question – presumably this is salary time?
    > Then add on the setting up of the sponsorship forms, posting, opening,
    > collating, telephoning, sending out the donor’s copy of the Declaration…..
    > Unless this runner has done some very serious sponsor-raising, it’s probably
    > already a loss-making exercise

    I’d support Julian here – we can get too hung up on the tax
    reclamation, and forget that it may cost us more to collect than it’s
    worth. Many charities used to have an in-house minimum limit for
    covenants : should we be thinking of something similar for Gift-Aid?

    Cheers

    Gerry


    Gerry Beldon MICFM
    GERRY BELDON INDEPENDENT FUNDRAISING
    phone/fax : 0191 251 6720 =/= mobile : 07976 405721
    http://www.beldons.co.uk =/= [email]gerry@beldons.co.uk[/email]

    Anonymous
    10 March 2004 at 11:14 pm #5255

    Date: Wed, 28 Feb 2001 10:28:27 -0000
    From: Larry Boyd

    Donation envelopes printed with a Gift Aid form are one solution. Some
    churches doing this for charity collections. In the past we would have
    received a single check — now we receive a smaller check and a dozen
    envelopes with checks and cash.

    But who is the charitable donor in the case of a sponsored run? What
    if my friends give me checks in my name that go into my bank account
    and I then give a corresponding amount to a charity out of my bank
    account. I make a Gift Aid declaration for that donation? My name is
    on the check, I pay taxes — legally, I am the donor. I cannot find
    anything in the Charity Commission or the Inland Revenue rules which
    contradicts this.

    ++++++++++++++++++++++++
    Larry Boyd
    Communications Officer
    Tools For Self Reliance
    http://www.tfsr.org [email]communications@tfsr.org[/email]

    Anonymous
    10 March 2004 at 11:15 pm #5256

    Date: Wed, 28 Feb 2001 13:40:14 -0000
    From: Rob Daly

    Sophie,

    The best people to speak to are the Inland Revenue themselves. They have
    who have a help line: 0151 472 6038.

    After the advice about loosing entitlement as soon as the cheque or cash is
    paid to the runner, I became concerned myself and gave them a ring. This
    advice is partially incorrect, under these circumstances, though probably
    correct under other circumstances. There are a number of procedures you
    need to follow to claim back the tax if you notify them of a ‘modified
    basis’. What this means I don’t know, but more details are contained in
    their Guidance Notes which I requested.

    As your enquiry is quite complex, you’d save yourself a whole lot of time
    and contradictory information by giving the Inland Revenue a call.

    Rob Daly
    The Rainforest Foundation, UK
    City Cloisters
    196 Old Street
    London EC1V 9FR
    T: +44 (0)20 7251 6345
    F: +44 (0)20 7251 4969
    http://www.rainforestfoundationuk.org

    Anonymous
    10 March 2004 at 11:16 pm #5257

    Date: Wed, 28 Feb 2001 14:25:15 +0000
    From: R. Forbes Ridland

    Sophie,

    If the runner receives cash donations he or she could send a cheque for the
    amount raised to the respective charities and, if the runner is atax payer,
    make
    a gift aid declaration against his/her own tax status. ergo no fuss!

    Forbes Ridland
    Goodwill Legacies
    Dunedin House
    25 Ravelston Terrace
    Edinburgh
    EH4 3TP
    tel: 0131-459 9293
    email: [email]forbes.ridland@goodwilltrust.co.uk[/email]

    Anonymous
    10 March 2004 at 11:16 pm #5258

    Date: Thu, 1 Mar 2001 09:45:40 -0000
    From: BIBIC Fundraising Dept.

    Sophie

    Like Rob I also became concerned about loosing entitlement for Gift Aid if
    the sponsorship passed through the participant, and I headed for the
    Guidance Notes to which he refers to check my understanding of the rules.
    The notes in full are posted on the revenues web site at
    http://www.inlandrevenue.gov.uk/charities/index.htm. Section 3.15 deals with
    sponsored events in detail, and section 3.11.9 deals with donations split
    between two charities. The modified reporting procedures for sponsored
    events that Rob refers to are in section 6.6, and a model sponsor form is in
    Appendix B2.

    Hope this helps
    Paul Trollope
    Fundraising Officer, BIBIC

    ——————————————–
    BIBIC – helping children achieve more
    Knowle Hall, Bath Road, Knowle, Bridgwater,
    Somerset, TA7 8PJ
    e-mail: [email]fundraising@bibic.org.uk[/email]
    Tel: 01278 684060 Fax: 01278 685573
    Registered Charity No 1057635

    Anonymous
    10 March 2004 at 11:17 pm #5259

    Date: Thu, 1 Mar 2001 10:00:51 -0000
    From: Barbara Davis

    > —–Original Message—–
    > From: Larry Boyd [SMTP:communications@tfsr.org]
    > Sent: 28 February 2001 10:28
    > Subject: funduk GIFT AID> re: Gift Aid/sponsored events
    >
    > Donation envelopes printed with a Gift Aid form are one solution. Some
    > churches doing this for charity collections. In the past we would have
    > received a single check — now we receive a smaller check and a dozen
    > envelopes with checks and cash.
    >
    > But who is the charitable donor in the case of a sponsored run? What
    > if my friends give me checks in my name that go into my bank account
    > and I then give a corresponding amount to a charity out of my bank
    > account. I make a Gift Aid declaration for that donation? My name is
    > on the check, I pay taxes — legally, I am the donor. I cannot find
    > anything in the Charity Commission or the Inland Revenue rules which
    > contradicts this.
    >
    > ++++++++++++++++++++++++
    > Larry Boyd
    > Communications Officer
    > Tools For Self Reliance
    > http://www.tfsr.org [email]communications@tfsr.org[/email]

    The Inland Revenue produce a booklet, IR65 Giving to charity by Individuals,
    in which this point is covered:-

    “Question: Can I use Gift Aid to pay the proceeds of fund-raising events
    to charity?

    Answer: If you have simply collected money from other people, such as on a
    flag day, you have not given the money yourself, and the other people have
    not made a declaration to the charity that they are taxpayers, so the
    payment is not made under Gift Aid. However, if you have been sponsored
    for an event, and each sponsor has signed a Gift Aid declaration, then the
    charity can recover the tax on the amounts covered by declarations.
    Charities may produce sponsorship forms for this.”

    It has never been possible under Gift Aid to claim a gift as your own when
    you are passing on money collected from other people.

    In the case of a sponsored event the person taking part is raising money for
    the charity specified and all cheques should be made payable to the charity.
    The money cannot be paid into the participant’s bank account as it is
    regarded as a “bucket collection” and is not part of their own taxable
    income..

    You should also remember that any verbal declarations made as to being a
    taxpayer will have to be confirmed in writing by the charity.

    Barbara Davis
    Information Manager
    Charities Aid Foundation
    [email]bdavis@charitynet.org[/email]

    Anonymous
    10 March 2004 at 11:18 pm #5260

    Date: Thu, 1 Mar 2001 10:33:50 GMT
    From: Gerry Beldon

    The message <200103011018.KAA04140@lists.dircon.co.uk>
    from “BIBIC Fundraising Dept.” contains
    these words:

    > I headed for the Guidance Notes

    Anyone whose experiences of dealing with Inland Revenue, Customs &
    Excise or Charity Commission are a few years old may not be aware of
    just how helpful they can be tehse days : the websites are full of
    useful (and objectively correct) information which is relatively easy
    to access.

    As this thread has shown, a forum like this will give a variety of
    shades of opinion, but that’s not really what you want when dealing
    with the taxman 🙂

    Cheers

    Gerry


    Gerry Beldon MICFM
    GERRY BELDON INDEPENDENT FUNDRAISING
    phone/fax : 0191 251 6720 =/= mobile : 07976 405721
    http://www.beldons.co.uk =/= [email]gerry@beldons.co.uk[/email]

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