Claiming taxable expenses

First of all let me explain that I help out dogs charities because dogs need help and appologies if this subject has been raised before.

Does anyone know if charities offer to pay travelling expenses to transporters and homecheckers? Because this is how the system would work:

Charity pays 40 pence per mile to the volunteer, the volunteer then donantes back ALL of those expenses to the charity, which then means that the charity has not actually paid out anything, but the volunteer can then claim charity tax relief. Of course the volunteer could donate 110% back to charity to ensure that any admin expense is covered. Under this system the volunteer would of course not make anything, but would recover most of the actual cost of his expenses.

Just a thought, here is the info direct ftom the Inland Revenue's own website:

How donated expense payments can qualify for Gift Aid
Gift Aid only applies to gifts of money. If volunteers decide to support your charity or CASC by not claiming the expenses they are entitled to, Gift Aid can’t be claimed on the amount of expenses foregone - as they are not a gift of money.

Where your charity or CASC physically pays the expenses to a volunteer, they are free to keep the money or may choose to donate some or all of it back to your charity or CASC. Gift Aid can only apply when the volunteer makes an actual payment of money to your charity or CASC. For the payment to qualify, the other rules of the Gift Aid scheme must be met including ensuring that the limits on the value of any benefits given to the volunteer in return for donations are within certain limits. For audit purposes, it is preferable that at least one of the payments by your charity or CASC, or by the volunteer, is made by cheque that has been clearly and properly recorded.

Alternatively of course the volunteer could donate 128% of his expenses (I believe gift aid is 28%, although that may only apply when the charity claims gift aid, it might be at the individual's own tax rate ie 22% or 40%) in this case he would not be out of pocket but the charity would in fact GAIN financially without any additional cost to the volunteer

Sounds like a great idea, thanks for sharing the info Steve.

So am I right in thinking it works like this:

e.g. Volunteer does transport run and asks for £10 petrol money. Charity gives money to volunteer. Volunteer decides to donate money back to Charity and Charity can then claim an extra 28p (or whatever gift aid is now) for every pound given.

So effectively, in this example, the Charity would make £2.80, just for passing the money back and forth?

Jod wrote:Sounds like a great idea, thanks for sharing the info Steve.

So am I right in thinking it works like this:

e.g. Volunteer does transport run and asks for £10 petrol money. Charity gives money to volunteer. Volunteer decides to donate money back to Charity and Charity can then claim an extra 28p (or whatever gift aid is now) for every pound given.

So effectively, in this example, the Charity would make £2.80, just for passing the money back and forth?

Yes that's it! I have contacted 'Last Chance Rescue' this morning and they are putting it forward for their accountant to look at. They did say that it may involve extra admin, but I then volunteered to do that admin for them. I did detect that the lady that I spoke to did not seem too keen though, so I hope she psses on the info. When you think of all the thousands of miles collectively driven and the fact that the alowance is 40p a mile (quite generous) fro the first 10,000 per year, it adds up to a fair amount

Well this will be very good news as all the donations are payed in to A Community Account and we are reged with the tax man for GIFT AID

dave wrote:Well this will be very good news as all the donations are payed in to A Community Account and we are reged with the tax man for GIFT AID

Do I need to flag this scheme up with someone then? rather than passively wait until someone with some clout notices it.

I thought this was a well known thing to do.

It's all on the HMRC website if you read it .

crazydiamond wrote:I thought this was a well known thing to do.

So why aren't ALL the rescue's doing it then?

misty3202 wrote:It's all on the HMRC website if you read it .

I not only read it! I quoted from the Inland Revenue's website (and said so) in my original post (in red so readrers wouldn't miss it)

I'm sure Gift Aid is well known, but a lot of volunteers will do transport runs for free (out of their own pocket) and wouldn't have thought to ask for money from the Rescue and then give it back.

I know I never thought of it on the runs I've done and no Rescue has suggested it to me. It sounds like an excellent way to get some more funds for the Rescues though

Jod wrote:I'm sure Gift Aid is well known, but a lot of volunteers will do transport runs for free (out of their own pocket) and wouldn't have thought to ask for money from the Rescue and then give it back.

I know I never thought of it on the runs I've done and no Rescue has suggested it to me. It sounds like an excellent way to get some more funds for the Rescues though

That's what I think, if you imagine all the thousands of miles driven annually X 40p per mile x 28% it will add up to a fair amount for the Rescue's, anyone reading this should suggest it to the rescue centre that they volunteer for.

what a great idea all for a bit of extra admin which for most small rescues is just someones time and most rescues will know of someone willing to help out with admin issues.

All that extra money the government are happy to donate to charity if only people would claim.

would work for some charities i guess, though if its regular then the taxman may look into it and see that money was changing hands as a funding ploy, and may have issue with that.
but also i think most rescues are not registered charities, so would not be able to participate (i'm not registered), also would imagine that most rescues are not financially able to pay volunteers expenses at 40 pence a mile (or maybe again, thats just me), even if they knew they would hopefully be getting the money donated back to them.
also, the person doing the transport would have to be paying tax etc, and in my experience, most of the volunteers who are free to help with driving are those who arent working, or not working enough hours/ earning enough to pay tax.
would involve a lot of trust, if it was a long transport run, in case of the rescue paying out at that rate, and then the driver possibly not donating that money back.
its certainly food for thought though...