Handling Gift Aid overclaims and refunds (UK only)

Having processed eligible donations in a Gift Aid claim in the Giving module, it sometimes happens that subsequent changes happen that lead to an over-claim of Gift Aid, giving rise to a refund due to HMRC.

In this article

What can cause an over-claim?
Guide to donation statuses in the Giving module
Recording an overclaim against a donation
Processing a manual claim with HMRC
Submitting an automatic Gift Aid claim with overclaim refunds

What can cause an over-claim?

1. The giver isn't expecting to pay sufficient tax

Having processed and claimed Gift Aid on a giver's donations, it sometimes happens (especially with self-employed people) that they come back to you after the donation and tell you they aren't paying sufficient income tax and so they no longer want Gift Aid reclaimed on their gifts - in effect, cancelling their Gift Aid declaration. However, they may also request that you return some or part of the Gift Aid already reclaimed on donations already processed and claimed back from HMRC. While it is the giver's responsibility to repay Gift Aid where insufficient tax has been paid, many churches are happy to process an overclaim and offset the overclaimed Gift Aid due against their next Gift Aid claim. This is perfectly acceptable practice.

2. The donation amount is reduced after the Gift Aid claim is submitted

Another cause of overclaims is if, after having submitted a Gift Aid claim, you subsequently discover a mistake when reconciling your accounts or at the end of year audit/examination. Once donations have been included in a Gift Aid claim they are locked and no further changes to the donation amount can be made. In this scenario you will need to contact ChurchSuite Support and a Developer will make the necessary changes to the locked donation - we'll need to know your church name, the giver name, and the donation amount(s) and date(s).

3. The donation amount is increased after the Gift Aid claim is submitted

It is not possible to edit the amount of previously claimed donations. In the scenario where the donation amount needs to be increased, a new donation should be added for the increase, perhaps adding a note against the donation to indicate the reasons, for audit trail purposes. This additional donation can then be included in your next Gift Aid claim.

4. The Gift Aid 'split' for a couple is changed after the Gift Aid claim is submitted

If the Gift Aid 'split' for a giver changes after the donation has been claimed then this too may give rise to an overclaim. For example, if the Gift Aid split was originally set so that 100% of Gift Aid applied to the giver in question, but now the donation split needs amending to 50%/50% between the giver and their spouse, an overclaim will arise if the spouse does not have a valid Gift Aid declaration. In this scenario you will need to contact ChurchSuite Support and a Developer will make the necessary changes to the locked donation - we'll need to know your church name, the giver name(s), the Gift Aid split change, and the donation amount(s) and date(s). If the spouse giver is able to provide a valid Gift Aid declaration then a change in split will not result in an overclaim refund

Guide to donation statuses in the Giving module

Note: The Gift Aid "donation" statuses below are not to be confused with the Gift Aid "claim" statuses, which progress from "Unclaimed" to "Reviewed" to "Completed" (or "Submitted" if submitted online to HMRC).

  • Not Claimable - a valid Gift Aid declaration is not held for the giver. This donation is fully editable. Donations will not be included in your Gift Aid claim.
  • Unclaimed - a valid Gift Aid declaration is held for the giver, but the donation has not yet been included in a Gift Aid claim. This donation is fully editable.
  • Override - the Gift Aid declaration 'auto-detect' has been overridden so that Gift Aid is not claimed for this donation, irrespective of a valid Gift Aid declaration being held. This donation is fully editable.
  • Claimed - The donation has been included in a Gift Aid claim. Clicking on 'Reverse Gift Aid' from the options icon will display the donation details. A full or partial Gift Aid refund can then be added. Clicking the 'Edit Donation' option will take you to the Donation Edit page, from where only the fund, giving method, notes and refund amount can be changed. Clicking on the donation status will redirect you to the claim where the donation is included.
  • Overclaimed - The donation has previously been included in a Gift Aid claim, but the giver's circumstances have changed giving rise to a full or partial refund of Gift Aid being necessary. Only the fund, giving method and notes can be changed, and a full or partial Gift Aid refund can be recorded. Clicking on the donation status will redirect you to the claim where the donation is included.
  • Overclaimed & Refund In Progress - A Gift Aid refund has been recorded against an overclaimed donation, but the refund has not yet been included in a Gift Aid claim (which will offset the refund against the claim). Only the fund, giving method and notes can be changed The full or partial refund amount can still be edited or removed while the claim is "Unclaimed". Once the claim has been reviewed and the claim status changes to "Reviewed", no further changes to the donation refund are possible. Clicking on the donation status will redirect you to the claim where the donation is included.
  • Claimed & Refunded - the previously claimed Gift Aid on this donation has now been included in a claim that has been reviewed. Ensure the claim is submitted to HMRC if it hasn't already been done. Clicking the 'Edit Donation' option will take you to the Donation Edit page, from where only the fund, giving method and notes can be changed. The refund can still be amended if the claim status is "Reviewed", but the claim must be rolled back to "Unclaimed" before the refund can be edited. The refund is locked when the claim status changes from "Reviewed" to "Submitted" or "Completed". Clicking on the donation status will redirect you to the claim where the donation or the refund is included.

Recording an overclaim against a donation

There are two ways to change a claimed donation so that overclaimed Gift Aid can be refunded to HMRC - the method you choose is dependent upon whether the giver's Gift Aid declaration is to remain active so that future donations are still claimable: -

If future donations are to no longer be claimable, you can edit the giver's Gift Aid declaration and enter an "End date" within the Giver's profile page in the Giving module. In this method a new Gift Aid declaration will be required if future donations are to be claimable.

Adding a declaration end date will cause all subsequent, previously "Claimed" donations to change to an "Overclaimed" status and future donations will show as "Not claimable" (until a new valid declaration is added).

You can then select "Reverse Gift Aid" from the action cog of the overclaimed donation...

...enter the full or partial refund Gift Aid amount (which must not exceed the original claimed amount)...

...which will change the donation claim status to "Overclaimed and Refund In Progress". This status will remain until the refund is included in a Gift Aid claim (then the status will change to Claimed and Refunded).

Another way of setting "Claimed" donations as "Overclaimed", while leaving the giver's Gift Aid declaration active, is by selecting the "Reverse Gift Aid" option from the action cog of any "Claimed" donations on the giver's Donations list.

...enter the full or partial refund Gift Aid amount (which must not exceed the original claimed amount)...

...which will change the donation claim status to "Overclaimed and Refund In Progress". This status will remain until the refund is included in a Gift Aid claim (then the status will change to Claimed and Refunded).

In both the above methods, the refund amount can still be further edited or removed, as long as the status includes "Refund in progress". Once a claim with refunds is submitted to HMRC, the refunds becomes locked and further changes are not possible. To edit/remove a refund, click "Edit donation" from the action cog.

You can now proceed with running your Gift Aid claim in the usual way.

What do givers see?

While Giving module users see the full audit trail and donation status of "Claimed and Refunded", your givers will see the "netted" Gift Aid on their Statement of Donations and when viewing their donation history in My Giving within the member-facing My ChurchSuite. This means that if any overclaimed donations have been fully refunded, the Gift Aid amount against those donations will show as zero (i.e. as if no Gift Aid were ever claimed).

The remainder of this article describes how overclaim refunds are handled within that Gift Aid claim process.

Processing a manual Gift Aid claim with overclaimed refunds

If your church produces manual Gift Aid claims and uploads them through the HMRC online portal, you are able to use HMRC's online form to indicate that an over-claim has occurred and that an over-payment of Gift Aid has been made to your church and now needs to be refunded. Further explanation and the form can be found on HMRC's website here.

Having added a claim and completed the review process, you now have the option to "Download [the] claim CSV". The CSV file contains all the information that you will simply copy and paste into the HMRC spreadsheet for submission. Where a claim includes overclaim refunds, a warning message is displayed when downloading the claim CSV file - this message reminds you of the total refunds amount in respect of overclaims that needs to be manually entered into the appropriate box in the HMRC spreadsheet prior to submission.

Note that refunds for overclaimed donations in previous tax years can (and will be) included when previewing and submitting your claim - it is not necessary to keep refunds to just those claims within the tax year in which they arise.

Submitting an automatic Gift Aid claim with overclaim refunds

For churches using ChurchSuite's "Submit to HMRC" functionality to upload their claim online from within the Giving module, processing refunds is considerably easier. The online submission includes full details of your claims and refunds. HMRC will then refund you the "net of refunds" amount of Gift Aid. Negative net claims are permitted - HMRC will simply deduct any net amount owing from your next Gift Aid claim. Note also that refunds for overclaimed donations in previous tax years can (and will be) included when previewing and submitting your claim - it is not necessary to keep refunds to just those claims within the tax year in which they arise.

When preparing a Gift Aid claim, you have the option to include overclaim refunds in the claim you submit to HMRC within ChurchSuite's Giving module - notice the "Include refunds" checkbox.

The previewed claim now lists all donations and refunds, ready for your review - note the "Donations" tab and the "Refunds" tab.

Once you are happy, click "Save changes" to complete your review and follow the processes for finishing and submitting your claim - see related supports for more information.

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