What a valid Gift Aid declaration needs, and why so many fail
HMRC's rules for a declaration are short. Most claims that go wrong come down to a missing house number or a postcode that isn't one.
Research commissioned by HMRC puts unclaimed Gift Aid at around £560 million a year (Plinth, reporting the HMRC research). Some of that is donors who never tick the box. A lot of it is declarations that exist but can't be used, because a detail HMRC needs is missing or wrong.
What HMRC actually asks for
HMRC's guidance for charities sets out what a declaration must contain (Chapter 3, section 3.6). It is a short list:
- The donor's name. HMRC asks for a full name, to identify the donor accurately.
- Their home address. For a UK address, HMRC accepts the house number or name plus the postcode.
- The charity's name. A working name or acronym is fine if it identifies you beyond doubt.
- Which gifts it covers. One donation, or all donations, for example.
- Confirmation that the gifts are to be treated as Gift Aid donations.
You also have to give the donor an adequate explanation of what Gift Aid means for their own tax.
Where declarations break
None of that is hard. The trouble is what happens between a donor typing into a form and your claim being assembled months later:
- No house number. The address field accepted a street name alone, or the donor skipped it.
- A postcode that isn't a postcode. A town name, or a postcode with a letter swapped for a number. It looks filled in, so nobody notices.
- An initial instead of a name. "J Smith" is weaker than a full name for identifying the donor.
- Declarations that don't say what they cover. Common with older paper forms and imports from other systems.
- Declarations left behind in a switch. The donations came across to the new system; the declarations didn't.
Checks to run before every claim
- Every declaration has a full name, a house number or name, and a postcode in a valid UK format.
- Every declaration says which gifts it covers, and every gift you are claiming on is covered by one.
- Refunded gifts are out of the claim.
- Anything that fails is listed with the reason, so someone can contact the donor, rather than silently dropped.
The fourth point is the one that recovers money. A declaration with a bad postcode is usually a two-minute email to the donor, not a lost claim.
Keep the records
HMRC expects a charitable company to keep Gift Aid records until six years after the end of the accounting period they relate to. For a charitable trust it is the later of six years after the end of the tax year and 12 months after the claim (section 3.30). That applies to declarations you brought across from an old platform too, which is a good reason to check they came across before you close the old account.
Fix it at the point of giving
The cheapest place to catch a bad declaration is the donation form itself: make the house number required, check the postcode's format as it is typed, and ask for a first name and surname rather than one name field. Everything after that is chasing.
Our platform checks each declaration for these details before it goes into a claim and lists the ones that need fixing. The checks are worth running whatever system you use.