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The Charity Commission for Northern Ireland
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Common tax mistakes made by charities

HMRC (Her Majesty’s Revenue and Customs) has published a list of the most common tax mistakes made by charities.

The statistics, from HMRC’s Charities Outreach Team, show that the main error made by charities relates to their failure to inform HMRC when personnel change or new employees are appointed. The second most common mistake is charities claiming incorrect amounts under the Gift Aid Small Donations Scheme (GASDS) income.

According to HMRC charities enter the total donations collected rather than the total eligible amount.  If charities collect donations greater than the maximum specified amount for the year, (£5,000 up to 5 April and £8,000 from 6 April 2016) they should only enter the maximum amount rather than the actual amount collected. Other errors include:

  • out-of-date GASDS claims
  • errors completing the paper claim form
  • claims for non-qualifying donations, for example, joint donations or company donations.

HMRC has also published a free step-by-step online guide to help charities complete their Gift Aid donations schedule. The guide tells charities how to claim tax back on eligible donations, use the right software, complete the schedule, and fill in the form.