Online gift aid claims service will go live on 22 April

HMRC has today published guidance on Charities Online, the new service that allows charities to make gift aid claims electronically and be paid within 15 working days.

Charities Online will be available from 22 April to around 110,000 charities and community amateur sports clubs that claim gift aid on donations.

HMRC says that claiming online is faster, can prevent delays and save postal costs. The new service will have built-in checks that will tell charities about mistakes before they submit their claim, reducing the need for claims to be sent back for corrections.

It will also cut red tape for claims for sponsored events. For claims made using Charities Online, all the donations for someone taking part in a sponsored event can be put as one entry under the name of that participant. This means charities won't need to list every individual donor who sponsored the person, which is what happens now for fewer than ten donors. Only individual donations from a donor of £500 or more shown on individual sponsor sheets will need to be separated out and listed individually on the claim form.

The rules for aggregating gift aid donations will also change for Charities Online, allowing claimants to add together more small donations. The current limit of £500 will be increased and claimants will be able to aggregate individual gift aid donations of £20 or less, up to a total of £1,000 per entry.

Charities can make claims in one of three ways, depending on how many donors they are claiming for and whether they have access to the internet – using an online form, through their own database, or with a paper form.

One of the conditions for making a claim is that the charity should have the donor’s postcode, though the guidance states that as not all charities have their donor's postcode, “transitional arrangements” will allow claims to be made without a postcode. But it doesn’t state how long the transitional period is.

HMRC goes on to warn that “if you don't include a postcode for UK addresses your claim could take longer to handle and HMRC is more likely to review the claim or ask you to provide full address details for the donors.”

The guidance concludes that HMRC will publish new template spreadsheets with explanations on how to use them in early March 2013, along with details on how to sign up to use Charities Online and how to access, complete and upload the spreadsheets.

In order to give charities more time to prepare for the changes, HMRC will continue to accept the existing R68(i) print and post forms until 30 September 2013.

From April, charities will also be able to use Charities Online to make claims under the gift aid small donations scheme. Further details about this will be published in mid-March.