Gift Aid for shuls: a practical guide for treasurers

Gift Aid is the largest piece of free money available to a UK shul, and the most commonly under-claimed. A community taking £150,000 a year in eligible giving is leaving something in the region of £37,500 on the table if it does not claim, every year, indefinitely.

It is under-claimed for an unglamorous reason: the claim depends on record keeping that has to happen at the moment of the donation, and most shuls only think about it once a year, by which point the records are incomplete.

What Gift Aid is worth

When a UK taxpayer donates to a charity, the charity can reclaim the basic-rate tax the donor already paid on that money. In practice that is 25p for every £1 donated. A £100 donation becomes £125 to the shul, at no cost to the donor.

The donor must be a UK taxpayer and must have paid at least as much Income Tax or Capital Gains Tax in that tax year as all the charities they support will reclaim on their donations. That is the donor's responsibility rather than the shul's, but it is why the declaration wording matters.

The declaration is the whole thing

No valid declaration, no claim. A Gift Aid declaration needs to capture, at minimum:

• The donor's full name.
• Their home address. HMRC will accept house name or number plus postcode, but the full address is safer.
• The name of the shul or charity.
• Which donations it covers: past, present, future, or all three.
• A statement that they want the shul to treat those donations as Gift Aid, and confirmation that they understand they must have paid enough tax to cover it.
• The date it was given.

A single enduring declaration can cover all future donations, and can be backdated to cover donations in the previous four years. That backdating clause is worth having in your wording, because it turns one new declaration into several years of claim.

Declarations can be made on paper, online, or verbally, but a verbal declaration must be confirmed in writing to the donor, and the claim cannot be made until the donor has had a chance to respond. In practice, capture them digitally.

What is eligible, and what is not

Eligible, in the ordinary case:

• Straightforward donations of the donor's own money.
• Appeal and campaign contributions.
• Sponsorship money, where the sponsor gets nothing material in return.
• Membership subscriptions, in many cases. See below, because this is the part shuls get wrong.

Not eligible:

• Payments for something. Dinner tickets, raffle tickets, an auction lot, a simcha booking, seat rental sold as a service. The person received value; it is a purchase, not a gift.
• Donations from a company rather than an individual. Companies get their own relief instead.
• Money that is not the donor's own, including a collection they gathered from others and paid in as one sum.
• Donations from another charity, and payroll-giving contributions.

Membership subscriptions: the part that matters most to shuls

A shul's largest recurring income is usually membership, so whether it can be Gift Aided is the single biggest number in this whole subject.

Subscriptions can be treated as donations where the member does not receive significant benefits in return for them. HMRC applies limits to the value of benefits a donor may receive: for donations up to £100 the benefit may not exceed 25% of the donation, and above that a further 5% of the excess applies, subject to an overall cap. Benefits that are simply the right to participate in the religious life of the community are treated differently from benefits with a clear market value.

This is exactly where it gets shul-specific. Membership that confers a reserved seat, burial rights, or a discount on hall hire is not the same as membership that confers the ability to take part in communal life. Some shuls unbundle: a genuine donation element plus a separately priced element for the benefits. That can be the right answer, and it is a conversation to have with your accountant rather than a box to tick in software.

The Small Donations Scheme, which shuls routinely miss

The Gift Aid Small Donations Scheme (GASDS) lets a charity claim a Gift Aid-style top-up on small cash and contactless donations without a declaration at all: the anonymous collection, the cash in the pushke, the contactless terminal in the lobby.

There is a per-donation limit (small donations only), an annual cap on the amount of donations you can claim on, and an eligibility condition tied to your ordinary Gift Aid claims. There are also community buildings rules, which can allow a charity running activities in more than one building to claim a separate allowance for each, which is directly relevant to a shul with a separate beis medrash or a branch minyan.

GASDS is worth a specific conversation with your accountant. It is the one part of Gift Aid where shuls with significant cash giving are most often claiming nothing at all.

Payment fees: know your position and be consistent

When a donation arrives by card, the shul receives the donation less a processing fee. Whether you claim Gift Aid on the amount the donor gave or the amount you received is a question worth settling explicitly with your accountant, documenting, and then applying consistently across every claim, rather than deciding it differently each year depending on who prepares the return.

Kehilla computes Gift Aid on the gross amount the donor gave, before processing fees: the fee is the shul's cost, not a reduction in the gift. It does so at report time rather than at donation time, so a change in approach applies consistently across your whole history rather than leaving a seam in the middle of it.

Records: what you must be able to produce

HMRC can ask to see the evidence behind a claim, and the claim fails without it. You need to be able to show, for every donation claimed:

• The donor's valid declaration, and the date it was given.
• That the donation is that donor's own money.
• The amount, the date, and how it was received.
• An audit trail linking the declaration to each donation it covers.

Keep these for at least six years after the end of the accounting period they relate to. Six years is the minimum retention, not a deadline to delete on. If a record is still relevant to an open matter, keep it.

The failure mode is not usually a missing declaration form. It is a shul that holds 300 signed declarations in a filing cabinet and cannot demonstrate which donations each one covers.

Making the claim

Claims are submitted to HMRC through Charities Online. You will need to be registered with HMRC as a charity for tax purposes, have your HMRC charity reference to hand, and submit the donation schedule in the format HMRC specifies. Claims can generally reach back four years, which means a shul starting properly today can often claim on historic giving too. It is the single highest-value afternoon of work available to a new treasurer.

How to stop leaking it

• Ask at the moment of donation, every time. A declaration prompt on the donate page and on the membership form collects more in a year than an annual mailshot ever will.
• Make the declaration enduring and backdated. One tick should cover the past four years and everything to come.
• Store it against the person, not the payment. Then eligibility is answered automatically for every future donation instead of being re-decided by hand.
• Mark eligibility on the income category. Decide once that dinner tickets are not eligible and appeal donations are, rather than judging line by line at year end.
• Reconcile as you go. A claim assembled monthly is a report. A claim assembled in March is an archaeology project.

You can estimate what your shul could reclaim with the Gift Aid calculator, and Kehilla captures declarations at the point of donation, applies them automatically to every eligible payment afterwards, and produces the claim schedule, which is one part of what it does.