5 ways to ensure your charity is less liable to fraud

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Safeguarding the funding of your charity or non-for-profit is a vital part of your stewardship of the organisation. Having real control over your income streams, knowing where and when funds are being spent and protecting your charity’s brand are all essential tasks for CEOs, trustees, and management teams of not-for-profits.

But we live in a world where fraud and cybercrime are an increasingly dangerous risk, especially for charities.

Recent statistics released by the Charity Commission show that over 200 cases of fraud and 250 cases of theft are generally reported in the UK charity sector each year. And the impact of these crimes on your charity’s funding can be significant – reducing the social care you can deliver and damaging your brand in the eyes of potential donors, investors and fundraising partners.

So, how do you protect your charity and make your organisation less prone to fraud?

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Gift Aid pitfalls for charities and individuals

Tax changes could mean a liability for donors who are no longer taxpayers

The increases to the personal allowance in recent years and the changes to tax on savings and dividends have taken significant numbers of individuals out of income tax.

There is a risk that more people will now pay insufficient tax to cover their gift aid donations and will have a liability to make good any shortfall to HM Revenue and Customs (HMRC). Individuals who are paying a small amount of, or no, tax should consider carefully whether to sign declarations for any new donations and whether they should withdraw existing declarations for ongoing donations.   HMRC guidance for individuals is available.

Charities should check the wording of their declaration form

HMRC has updated the gift aid declaration guidance and templates to make the non-taxpayer’s potential liability much clearer. Charities should check whether the wording they are using complies with the latest HMRC guidance from April 2016 as the charity may be liable if they reclaim gift aid and do not hold a valid declaration.

If you would like any assistance with any of the above, please contact us.

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