How to Record Donations To a Charity / Gift Aid

[candymoments]

I make personalised gifts and often get asked to donate small items to charity. How do I record this as I have two that I need to record, or do I even record this? Thanks Lisa

[Glenn]

Maybe this post will help:

Accounting for charitable donations

Thanks for your reply. In that case, perhaps I am misunderstanding something…? I want to record our income, which consists of grants and donations. I can’t see any way to record income except by calling it “sales” and generating an invoice. This APPEARS to be clearly inappropriate. However: On reading the help information, it seems that this is analogous to “Accounting for Daily Takings”, where no actual customer invoices are involved but a notional invoice is created in the system (and th…

[Joe]

If you’re trading as a sole trader (self-employed), you will pay Income Tax as an individual on your business profits. Therefore you can take advantage of the tax reliefs on gifts of money to registered charities by claiming them on your Self Assessment tax return.

Tagging:

Simply, set up the charity as a supplier and tag the transaction to the category ‘Donations’.

If the donation of money to the charity was made through Gift Aid from your Sole Trader Business, these will be treated in the same way as gifts from any other individuals, therefore, the normal Gift Aid rules apply i.e. you’ll need to make a Gift Aid declaration, to which end, the charity will normally ask you to complete a simple form - one form can cover every gift made to the same charity.