Can your charity claim Gift Aid? Well, that depends…
A charity with income under £5,000 still has charitable status, so long as it meets the criteria for a charity (see www.charity–commission.gov.uk/).
In order to benefit from charitable status and tax breaks, a charity can approach HMRC directly. Like a registered charity number, you can use a HMRC charity number as evidence of your charitable status. http://www.hmrc.gov.uk/charities/guidance-notes/chapter2/chapter_2.htm You are also entitled to claim Gift Aid from HMRC on any appropriate donations. Detailed step-by-step information can be found on the HMRC website: www.hmrc.gov.uk/charities/gift_aid/basics.htm#5
If a charity has an income of £5,000 or more, it must register with the Charity Commission, which will provide your charity with its own charity number.
The law does not permit a charity to use another charity’s number because each local charity is a legally separate entity. Nevertheless, you can ask a larger charity to hold funds restricted for use by your charity but you would need to get an agreement from that charity to do so.
In order to benefit from charitable status and tax breaks, a local charity can approach HMRC directly. Detailed step-by-step information can be found on the HMRC website: www.hmrc.gov.uk/charities/gift_aid/basics.htm#5
This covers the general position on how Gift Aid works, donations that qualify, claiming tax back and keeping records. You can also find the contact details for the HMRC Charities Helpline at: http://search2.hmrc.gov.uk/kb5/hmrc/contactus/view.page?record=XqbRdlnT_mo.
Back dated Gift Aid?
The general position is that charities can claim gift aid back from their exemption date, which is either the time the charity registers with HMRC or the Charities Commission. This means that usually you can claim Gift Aid from the time you have registered but not before.
However, what if you have donations from before you were registered?
HMRC has confirmed that it is open to charities to appeal the decision about the gift aid exemption date, and the further information is sent with the letter from HMRC.
Sending in a letter of appeal might be helpful, if you have been operating as a charity for a number of years previously. There is not guarantee of success, and the final decision rests with HMRC. Feel free to contact me for further information if this is something you would like to explore: email@example.com