Don’t look a Gift Aid horse in the mouth
Charles Scott examines protecting VAT recovery and the best use of Gift Aid in charity shops...
It has been fairly well reported that a number of charity shops are managing to claim Gift Aid on some of their sales. The difficulty with doing this, apart from the necessity to provide an extended audit trail from the donor of the goods through to the till (on top of the normal Gift Aid audit trail) is balancing all the VAT, corporation tax and business rates relief issues. There are a lot of experts out there on specific areas but none who seem to be able to think through all the issues at the same time and come up with the definitive answer that protects the charity’s tax position on all sides. The problem is that we are trying to fit a square peg into a round hole – the Gift Aid system was never designed with this in mind. This article explores some solutions.
Author: Charles Scott
Charles Scott is the finance director of Help the Aged.
He has an MBA from Cranfield University, and is a trustee of the Cranfield Trust.
He is also chair of his local church's finance group, is an FCA and is a Fellow of the Royal Society of Arts.
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