As registered charities, u3as are eligible to claim Gift Aid relief on membership subscriptions and donations, but only under tightly prescribed circumstances laid down by HMRC. Before enabling Gift Aid your u3a must read the advice from the Third Age Trust u3a.org.uk and HM Revenue & Customs to ensure that you are eligible to make Gift Aid claims.
Beacon's approach is to determine the income that could be put forward for Gift Aid relief according to the rules of HMRC, on the assumption that the user's u3a is eligible to make such claims in the first place.
Note that if your membership subscription is an inclusive rate then the whole amount will probably not be eligible. If this is the case and Beacon is to be used to manage Gift Aid, then the ledger records for member' joining or renewing will need to be manually adjusted. Do this before the ledger is reconciled and transactions are locked.
Responsibility for deciding whether or not Gift Aid claims should be made rests entirely with the U3A.
Gift Aid Set Up
Under System Settings (see 8.3) there is a checkbox labelled Tick to enable Gift Aid operation. Each u3a must decide whether or not to tick this checkbox and be responsible for the consequences of doing so. If the checkbox is ticked, Beacon will determine the income that can be submitted to HMRC for Gift Aid relief.
If the checkbox is not ticked, all Gift Aid functionality will be turned off (although Member Records will still record whether a member is eligible for Gift Aid claims).
Gift Aid Qualifying Transactions
If you enable Gift Aid be aware that a Gift Aid declaration will only include subsequent Gift Aid qualifying transactions. Gift Aid declarations are generated from the Ledger entry created when a member is added or renews. The date range of the Gift Aid declaration simply selects ledger entries in that date range.
If a new member is added and the Gift Aid box ticked then the fee is recorded as a Gift Aid amount in the ledger. If a member renews then Gift Aid is recorded if the date is set, even if the date is in the future. After the ledger is reconciled Gift Aid for a ledger entry cannot be changed.
Beacon cannot deal with retrospective Gift Aid declarations and the Gift Aid date acts like a flag to say the member has consented (see Gift Aid is not retrospective below).
Determination of income eligible for Gift Aid claims
Beacon follows strictly the HMRC rules in deciding how much of a membership subscription or donation may be declared for Gift Aid relief.
Ordinarily, Gift Aid relief may be claimed from that part of a membership payment that relates to the payer alone and only if the payer meets the rules for paying tax as indicated by the Gift Aid date field in the Member Record.
However, if a member and his/her partner both belong to a membership class with the Joint or Family attribute set (see 4.2), then relief may be claimed on the full joint membership payment if the payer alone meets the rules for paying tax.
Thus, to maximise their Gift Aid relief, u3as should consider having Joint or Family membership classes in addition to those for individuals. When setting up a membership class this is indicated by ticking "1 of 2 people at same address". The membership fee corresponding to a non-taxpaying partner cannot otherwise be declared for Gift Aid relief.
Note: Additional information about how Beacon handles members with partners and joint membership is available in 4.3.2 Shared Addresses & Joint Members
Downloading a Gift Aid Declaration
Select Gift Aid declaration on the Home Page. This option is present only if Gift Aid operation is enabled.
By default, the current financial year is shown and payments for which a declaration has previously been made are excluded.
To download a declaration spreadsheet, select the payments to be included by ticking the Select column (by default all payments are ticked) and press Download Excel.
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You will be asked to: If you press Mark, a Claimed date will be added to each Transaction (see below) and they will not appear again in a subsequent Gift Aid declaration. Therefore ‘Mark’ should only be selected when you are intending to use the download to make a Gift Aid claim. It is recommended to 'Skip' first time and check the declaration. |
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You will be given the choice of Opening the file on-screen or Saving the file in your default download location. Clicking the arrow next to Save gives the option of doing a Save-as to a specified location.
Notes:
- We are aware that HMRC insist that each individual record has a Title; e.g. Mr, Ms, Mrs. If these are in their Membership record that it flows into the download automatically.
- Although the spreadsheet format is correct for submission to HMRC, it is without the required header rows and not in OpenDocument format with extension ".ods". Therefore the contents must be copied and pasted into the official submission spreadsheet.
- Make sure you download the correct submission spreadsheet for either Excel or Libra Office. Also note that the Language setting must be UK English (it could be US English). Do a search for "hmrc guidance gift aid spreadsheet" and read carefully.
- The Date column of the HMRC spreadsheet says it should be in DD/MM/YY format. Experience suggests this is incorrect and a 4 digit year is required. Just copy and paste from the Beacon download and the dates in DD/MM/YYYY format have always been accepted on submission.
- Your must save in ods format (opendocumentspreadsheet). You do this using Save as.
- In addition to using the Gift Aid tick box on the Member Record, do keep copies of the forms on which their members have declared that they wish for Gift Aid to be claimed on their subscription (either electronically or on paper). Note that with on-line payments consent is explicitly given by the member for each payment.
- Members do not need to complete a new Gift Aid declaration every year. Once received, their declaration can be used indefinitely, or until the member indicates that they no longer qualify for Gift Aid. That said, it is good practice to remind members annually that they have consented to Gift Aid.
Excel Gift Aid Download
Note: Although the spreadsheet format is correct for submission to HMRC, it is without the required header rows. Therefore, the contents must be copied and pasted into the official HMRC spreadsheet.
Transaction with Gift Aid claim marked
Gift Aid is not retrospective
It is important to note that when a member's record is changed to have a Gift Aid date added this just acts as a flag for future membership fees (and donations) for that member to be included in a Gift Aid declaration that Beacon generates for HMRC. The reason for this is the Gift Aid declaration is generated from the Ledger entries that occur in the period specified for the claim. If a ledger entry linked to a member payment was created before a Gift Aid date was entered in the member's record it will not include any Gift Aid amount. It is possible to change this in Ledger entries manually providing the Treasurer hasn't locked them by reconciling transactions.
When a u3as first starts using Beacon they should claim Gift Aid up to the date of their migration using their pre-Beacon process.
Membership Renewal
For renewing members there is a Gift Aid tick box on the Membership renewals screen that can be ticked to make the renewal fee eligible for the subscription, or cleared to cancel consent that was previously registered.
For new members, ticking eligible for Gift Aid on the Add new member screen will ensure their fee will be Gift Aided.
Revision History
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v2 |
2021-04-23 |
Lyn Bossons |
Added KB 'Gift Aid is not retrospective' to end of 7.8 |
| v3 | 2021-07-17 | Graham Tigg | Added info. on HMRC submission format |
| v4 | 2022-12-04 | Graham Tigg | Made it clear that on the Add new member screen Gift Aid is a tick box. |
| v5 | 2023-01-10 | Graham Tigg | Updated for Jan 2023 enhancement |
| v6 | 2023-08-18 | John Alexander | Add advice on Title |
| v7 | 2024-07-11 | John Alexander | Add save in ods advice |
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