Sunday, 5 June 2016

HMRC Deliberately Obstructing Gift Aid Registration?

In the UK charities and non-profit organisations are entitled to register for Gift Aid. This means that for every £1 in public donations made by UK tax payers, the government will match 25p.

Extremely useful for charities.

Extremely easy to see why the government might wish to make the registration system so mind-numbingly convoluted that many charities give up straight away.

I feel it goes further than that. From what I have seen, it appears there is a concerted effort to turn away eligible organisations.

As someone who helps non-profits navigate paperwork for a living, I rejoiced when Gift Aid switched from paper to online registration

Having just attempted that online registration process, I honestly can't believe it's that bad by accident.

The old system used to be incredibly straightforward. You filled in an eight page CHA1 form and sent it to HMRC with a copy of your bank statement (if you had one), governing document and evidence of your activities.

The new system is filled with really irritating issues. Irritating, but probably just poor design by an organisation well known for under par web processes. Simple things like:


The problems begin right from the outset.

You want to register for Gift Aid. You might sensibly search register for Gift Aid online. You would get the following link: Claim Gift Aid Online.

If you click the big, green Start Now button you'll get sent to an HMRC log-in which will require your Government Gateway ID. So, first, you need to register your organisation with Government Gateway.

Only, when you eventually manage to sign in, you'll get the message You're not set up to manage taxes online and there won't be anything in there with the words Gift Aid or Charity to offer you further support.

This is because underneath the big, obvious Start Now button for claiming Gift Aid there is a subtle heading saying Before you start...

You can't just go to Claim Gift Aid Online and expect to claim Gift Aid online. Oh, no no no.

There are two other steps you need to attempt.


Fist off, you have to apply for a certificate to prove your tax exempt status. You need to do this even if you are fully registered with the Charity Commission because HMRC and the Charity Commission don't communicate with one another, that would be far too simple.

The fun begins straight away:

For your security, you’ll be signed out if you don’t use the service for 15 minutes or more. 
An unfinished application is only stored for 28 days from the last time it was saved.

The next piece of entertainment is that traditionally a charity in the UK must have a minimum of three trustees: Chair, Secretary and Treasurer, and a dual authority bank account. This second bit means that cheques require two signatures. No single person should be able empty the account.

Because of this, many small charity start-ups have the minimum requirement of three trustees with two bank signatories chosen from among those three. So, three trustees total.

It is reasonable to assume that trustees who deal with the charity's accounts are also going to be authorised to speak to HMRC regarding Gift Aid.

If you're doing that, you might find yourself stumped when HMRC ask you to provide the national insurance numbers for a minimum of four people involved in your organisation. 

After having told them about two other trustees.

Why four? Nobody knows. 

Time to promote someone really fast.


All of that is just HMRC being as helpful as you'd expect.

Then it starts to get extremely questionable.  

You finally make it to the end of the application process. 

You're given a list of supporting documents and less than one month to submit them. For example, if you submit on 3 June, the application will be rejected if your supporting documents haven't been received by 1 July.

There is a section at the beginning of the application where you enter your bank account details because:

Your charity’s bank, building society or credit union account details are needed so that Gift Aid and any other tax repayments can be paid into it.

In the case of a new charity start-up they may only just have set up a bank account. They may even be waiting to register for Gift Aid before they start fundraising, because 25p per £1 is not to be sniffed at.

Because they do not have account statements to show HMRC, they have to explain why. The legitimate answer is: 'because we have only just opened a bank account'.

Here is the list of documents they will then be asked to supply:

Notice there is no request for anything related to bank statements, because, in the banking section where they supplied their bank details, they explained they didn't have any. No other bank-related papers are listed above.

One entire month later and this rejection notice arrives:

Accounts were never asked for in the first place and instead of asking for the missing document to be sent, the entire application is rejected, all of the supporting documents that were painstakingly photocopied are binned, and the organisation is told to start the entire process again without even the courtesy of giving the web address to the  online application form.

There is one extremely patronising web link included to Find out what you can expect from us and what we expect from you.

I think we are all aware of what we can expect from HMRC.

Rejecting applications from charities because they didn't supply documents that were never asked for is ridiculous. Nothing about this feels like administrative myopia. It looks like clear-sighted obstruction.

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