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Good news
for
Gift Aid provides a great opportunity
for you to increase the value of your charitable income by enabling you to
reclaim 28% of admission income and other donations directly from the Inland
Revenue - more income with absolutely NO strings attached!
Did you know?
In the pre-Budget report dated 2nd
December 2004, Chancellor Gordon Brown announced that the current Gift Aid
scheme will continue operating until April 2006 when a new scheme will be
introduced which allows you to continue obtaining Tax Relief indefinitely -
that's GREAT News for all charities.
We can help your organisation take
advantage of the additional revenue provided within the Gift Aid Tax Relief
scheme with the fully approved 'Gift Aid' module in our Merlin® Retail
Management Software. Not only will this process all the Gift Aid contributions
automatically, including Inland Revenue reclaim, but it will also carry out ALL
your Point of Sale functions.
Below is some information I hope you will
find informative and useful, including an article recently published in the
Association of Independent Museums (AIM) magazine, Gordon Brown's future plans
for Gift Aid, details of how the Gift Aid module in Merlin® can help you
increase your income, and a case study about how ITC helped Chatsworth House
Trust.
Please click to jump to the article
you require:
An increasing number of museums and
other charitable trust attractions, including heritage trust properties and
wildlife centres, are now asking visitors who are UK taxpayers to make
donations in lieu of, but equal to, normal admission charges.
Tax paid by the donor can then be
recovered by the charity - so every £1 given is worth an extra
28p.
This is made possible by the
provision in Gift Aid scheme which relaxes the usual donor benefit rules.
Normally, a donor may not receive a benefit in return for his or her donation
if such benefit exceeds about 25% of the gift - so a free or reduced right of
admission to a property would not be permitted.
But, in certain circumstances
you can give free admission to UK taxpayers who donate (rather than pay) their
entrance charges - and you can recover the basic rate of tax paid by the
donor.
Of course, some visitors will not
qualify to be donors under Gift Aid - they may be from overseas and pay no UK
taxes, they may be unwaged, retired, at school or part of a group.
Nevertheless, around three quarters of visitors will qualify and they can all
be encouraged to become donors.
So - for those charity-owned
properties currently charginf ro admission. If they meet the right criteria,
they can benefit from the concession and claim back basic rate tax on all
donations given instead of entrance charges.
The effect on takings can be
dramatic - the value, after VAT, of all admissions can be boosted by around
20%.
Gift Aid donations can be accepted
in many different ways e.g. straight-forward gifts, membership subscriptions
and sponsorship.
What the Chancellor said about Gift Aid in his pre-budget
report on 2nd December 2004.
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Museums and other visitor
attractions run by charities will still be able to claim Gift Aid under the
current scheme until April 2006 when a new scheme will be introduced.
In last year's pre-Budget report, the chancellor announced that he
intended to stop charitable attractions from claiming Gift Aid on admission
fees.
Now a new scheme is being introduced which depends on visitors
donating an additional 10% on top of admission.
The new scheme, which
will benefit independent museums and other charitable trusts, will ask visitors
to contribute on top of the basic admission charge. They will then be able to
claim on both the admission fee and the donation. |
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| Provided they donate
at least an extra 10%, the whole amount will be eligible for Gift Aid.
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Merlin® - Making GiftAid Magic!
The Gift Aid module in the Merlin®
software was developed in response the growing number of Charitable Trusts
looking for a time and money saving solution within the EPOS facility. In
recognition of the Chancellor's recent announcement, the software is being
updated to incorporate the new scheme from April 2006.
The 'Gift Aid'
module fully integrates into their existing Merlin® EPOS software and was
designed to simplify the collection and recording of Gift Aid donations at the
point of admission.
To simplify the process further, address management
software is used to verify donor's details from their postcodes and house
numbers. Merlin® stores the information on a database ready to produce a
schedule to support your claim to the Inland Revenue. What's more, as the data
is stored electronically, there is no need to produce a declaration form for
signature, thus speeding up the admission process.
Merlin® Key Points
- It's very easy to use, even for
the technology shy.
- It saves time.
- It has been fully approved by the
Inland Revenue.
- It will significantly reduce
paperwork.
- It will speed up the admission
process.
- It will help admission staff
maintain a consistent approach, therefore increasing the visitor take-up rate.
- It gives your visitors an
opportunity to have a say in where a little of their tax goes.
- It will provide you with instant
management information.
- It is very affordable.
Case Study
Chatsworth
House Trust adopts Merlin®
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After careful
consideration and evaluation, Chatsworth House Trust decided that they needed
to take advantage of the additional revenue provided within the 'Gift Aid' Tax
Relief scheme.
In order to make sure this was handled effectively and
efficiently they decided to look for a suitable solution, utilising computer
based terminals at all entrances with appropriate software installed.
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Chatsworth made contact and asked for a demonstration of the
Merlin® Retail Management Software, which incorporates a fully approved
Gift Aid module. Initial enquiries suggested that the system would cope with
what was required and it was decided to provide a presentation for all senior
staff in order that they could evaluate the Merlin® software.
During this evaluation period some visitor numbers were obtained from
Chatsworth's records and it was estimated that the system would generate at
least £85,000 of additional revenue during its first year of operation.
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After this initial
consultation, Chatsworth made the decision to install the Merlin® software,
with associated Hardware, at all points of entry. This was accomplished in a
very short timescale as it was obvious that this additional revenue should be
available as soon as possible.
Initial training was carried out on site
over a one week period, while the installation of the equipment was being
completed. Installation was not entirely straightforward due to the location of
the terminals and cabling and connections had to be sympathetically carried
out. In addition, the existing Network infrastructure required integrating. All
necessary work was completey very smoothly, including the installation of
equipment at the garden and farm entrances, which because of the distances
involved, were linked via internal telephone lines. |
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The whole system was installed
within the time agreed and all staff moved over onto the new process. Despite
reservations from some of the 'less technologically advanced' members of the
team, the implementation went very smoothly and the system was immediately
providing the facilities required.
After only a few weeks it was quite
obvious that the 'conversion rate' of UK taxpayers was far higher than that
originally predicted and the new Merlin® system was providing additional
revenue, considerably higher than that initially estimated.
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This was completed in the
autumn of 2003 and has now run throughout the whole of the 2004 tourist season.
Chatsworth is happy that the installation has enabled the organisation to
implement the Gift Aid scheme quickly and effectively. Quite obviously this has
been a very successful implementation and one which Chatsworth House Trust are
pleased to have carried out.
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Carry
on Gift Aiding
- for the moment! |
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As museums prepare
their annual budgets for the next financial year, and with no further statement
from the Government on the future of the admissions Gift Aid scheme, AIM
members are reminded that the scheme is still valid and are urged to
continue.
It is possible that a statement will be made in the
Pre-Budget report (at the time of publication of this Bulletin). In the mean
time it is believed that any announcement of changes to the scheme will give
Charities one or two years' adjustment time from April 2005 (partly as a result
of a possible May 2005 election).
"So take heart," says consultant
Peter Kenwright, who has introduced the scheme at more than 50 museums and
heritage attractions. "If you have a scheme in place, get the message over to
visitors that it is still legal and that their help is vital. Get the same
message over to your admissions staff/volunteers."
Researching the
current state of the scheme, Peter Kenwright is pleased that there is little
'Gift Aid fatigue' among participating organisations. In a survey of clients
recently conducted by Peter comments include -
"We have not noticed any
reluctance on the part of the visitor to sign the form; in fact there seems to
be a general acceptance that it is now commonplace to sign such a form. We use
volunteers to act as proposers and this works well."
"Our Gift Aid
income remains steady. There is no adverse reaction from the public."
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"Our success rate is
similar to last year."
"We haven't noticed any increase in resistance
from visitors. The real struggle is maintaining a consistent approach by
staff."
"We have had a successful season so far as Gift Aid is
concerned with higher take up than last year. I think this is because we are
getting better and there is also increasing awareness from some visitors."
"Last year our Gift Aid take-up ran at an average of 30% of total
admissions, but this year had fallen to around 20%. Staff had reported some
reluctance from visitors so we used a costumed guide to 'work' the queues,
promoting the idea and its benefits to the customer. This has resulted in a
substantial increase to over 40% take-up."
"We have noticed an
approximate 10% drop in Gift Aid. This may be a shift in visitor profile as
foreign visitors return."
"We have slipped from 77% take-up to 54%
take-up. I suspect the cause is more likely to be that our admissions staff
have taken their eye off the ball than visitor recalcitrance. We obviously need
to discuss internally, and try harder."
Peter Kenwright suggests that
motivational 'booster' sessions for admission staff at the sharp end on Gift
Aid are worth while as they have proved effective in improving the take-up of
the scheme.
Article taken from the Association of Independent
Museums magazine December 2004 (AIM) |
Projected Annual
Gift Aid Revenue Calculations
| Name and
Location of Venue |
No of
Visitors p.a. |
Average
Cost of Entry |
Total
Revenue |
% Ratio
of UK Taxpayers |
Revenue
from UK Taxpayers |
Non-VAT
Donation Gift Aid Value |
Inc VAT
Donation Gift Aid Value |
| An Example
Venue |
20,000 |
£4.00 |
£80,000 |
60% |
£48,000 |
£12,096 |
£9,072 |
NOTE:
The above calculations are based on both
Admission Charges which include VAT and also Admission Charges which exclude
VAT so that an exact figure of available revenue is shown. Clearly, if efforts
are made to increase the take-up rate of Gift Aid then substantial additional
revenue can be obtained. It is quite normal to obtain up to 90% acceptance and
that is the figure used to provide the projected revenue stated above. Clearly,
if your visitor numbers or entry charges vary then the calculation needs to be
adjusted to take actual numbers and costings into account. Contact us for
detailed quotations. |
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