Struggling to Keep Up With Gift Aid? Let Your EPOS Take Care of It

27 February 2020

By Steve HANRAHAN, Business Development Manager – AURES UK

Gift Aid is a fantastic scheme for charities and their donors alike. It works as a form of tax relief for people when they make charitable donations, with the benefits passed on to the charity they are choosing to support.

If you are a UK taxpayer and give a charitable organisation £1, by opting into the Gift Aid scheme you are allowed to claim back the basic rate of tax you are presumed to have paid in earning that £1 (rounded out at 25%, or 25p in the pound) and pass that on to the charity. So for every £1 you give, the charity gets £1.25.

The scheme works for donated goods as well as cash gifts. When the charity sells a donated item, as long as it has been declared for Gift Aid, the charity can claim an extra 25% on top of the sale value from the government.

This helps charity shops to significantly increase their revenues from sale of goods. The only drawback is, there is a certain amount of complexity involved in administering the scheme.

For a start, every donation has to be declared for Gift Aid by the donor. This involves the donor in effect registering for the scheme, filling in a form with relevant details to show they are eligible, and then providing their consent for the charity to claim Gift Aid on any items they donate.

Charities then have to keep a register of who has declared for Gift Aid. When they receive goods from a donor who has opted into the scheme, they have to somehow track those items through to sale – usually by putting a Gift Aid sticker on them along with the price – and then make sure that the Gift Aid claim is added to their accounts once the item is sold.

If this sounds like a lot of work, it certainly can be. It is easy to lose track of which donors are and are not registered for Gift Aid, and miss out on claiming the extra 25% as a result. Gift Aid-eligible items can easily be confused with non-eligible items in the stock room and as goods are moved around the shop before they are eventually sold. Then logging the Gift Aid claim manually is an extra task for volunteer staff to do at point of sale.

Automated solution

Fortunately, nowadays charities can make use of sophisticated EPOS software platforms designed specifically for the retail charity sector that automate the whole Gift Aid process, end to end. AURES partners with charity retail software specialists to deliver cutting edge EPOS solutions that help charities take full advantage of Gift Aid.

It all starts with using CRM-like databases to register Gift Aid consent on the system. That way, whenever new donations arrive, you don’t have to rely on memory or thumbing through paper records to check if they are eligible for Gift Aid. Simply inputting the name of the donor into the system will bring up the information you need.

Items can also be logged as eligible for Gift Aid on a central database, so there is no risk of them being forgotten weeks or months down the line when the goods are sold – the EPOS system itself will flag it up as the sale is processed. With tablet-like Mobile POS (M-POS) devices, doing these checks on eligibility and logging each item can take place in the stock room as goods are organised on shelves.

Some charity EPOS systems make use of barcodes that can be printed off that include the price and Gift Aid eligibility information. When it comes to processing a sale, this saves staff having to remember to log the Gift Aid claim – simply by scanning the barcode, the claim is automatically calculated and added to accounts.

One final benefit some charities find from these systems is that they can also easily log sales of items by donor. This helps them to build stronger relationships with donors – over a period of time, say six months or a year, the charity can work out how much revenue it has generated from items donated by an individual, and how much extra they gained from Gift Aid. This helps to encourage people to donate more, and also serves as a prompt for people to sign up for Gift Aid.