Gift Aid and Woodturning clubs

[Robin Goodman]

I understand that some clubs claim Gift Aid, resulting in tax on members subscriptions being reclaimed.
   
Our club recently had a CHA1 application for ‘Recognition  as a Charity for Tax Purposes’  (applicable where income < £5.000pa) turned down by HMRC,  primarily on the basis that the main aims of the club, as given in its Constitution,  such as fostering friendship amongst woodturners, imparting knowledge and expanding the craft of woodturning, are apparently not charitable purposes in law.
 
I would be interested to hear about any clubs that do claim gift aid, with any advice on how to succeed with an application or how their aims differ and are charitable in Law, or whether they followed a different procedure from the CHA1 form route.

[admalin]

Looking at the Charities Act of 2009, A CHARITABLE PURPOSE is defined as follows:-

A purpose is charitable if  it is of public benefit and its aim is
(1) the prevention or relief of poverty or economic hardship
(2) the advancement of education
(3) the advancement of religion
(4) any other purpose that is of benefit to the community.

Wood turning clubs don't significantly meet any of these.

VAT is a more onerous tax, but charities do not automatically get relief.

Tony Malin

Tony Malin

[Andy Coates]

This is a very difficult area, and one in which I know about as much as I do about nuclear fussion. However, there is a man on the committee that might be able to help but he's out of the country until late January. He'll see this when he gets back and may jump in.

[kasandrich]

Education & public benefit look like the answers, the purpose of your club should be to promote and support improvement in members turning skills at all levels, in a pleasant social environment. If you also make efforts to involve schools children etc, at our committee meeting last night we discussed events including local schools and the Scouts. Your club can also hold open days and shows and participate in other local shows such as a stand at your local country fair or craft fair.

This would fullfil the education side as well as public benefit........but maybe your club does not do any of that stuff?


Its interesting though, as a committee member on my local AWGB club I am not sure if we utilise  gift aid, and it would be interesting to hear from other clubs that do and the justification and process they went through.

[admalin]

As a converse to the concept of clubs benefiting from gift aid, there is a way to pass on the 20% tax benefit from a club to a charity, but I plead the fifth amendment, so anyone interested will have to work it out for themselves.

Tony Malin

[Robin Goodman]

Thanks for your responses to date.    It obviously  is a grey area, but if a few clubs have been able to successfully register and claim gift aid, it would be nice to  know how they achieved it.      The aims of most clubs are probably much the same and no doubt have a fair bit in common with the aims spelt out in the AWGB Constitution, but may be Kasandrich is right and that the emphasis needs to be on education and public benefit. 

[Andy Coates]

I now have some further info relating the this which may be of interest.

As you'll know from reading your Revolutions newsletter the Association is going through the process for Charity status, and in fact we are very close now. We have taken professional legal advice to ensure all is above board Etc., and we are assured now that our application should be confirmed.

A part of CS is the ability to reclaim the Gift Aid element from subscriptions, which of course will benefit every member in as much as there will be more in the pot for events, training budget Etc., but will not of course benefit the bank accounts of individual or club members.

It seems (and I cannot catagorically confirm this, but have it on very good authority) that it is highly unlikely for individual clubs (not just of this association, but any) to be awarded Gift Aid due a recent change in the rules/regulations and guidelines issued by HMRC and the Charities Commission.

I know of a small number of AWGB clubs that were/did apply, but have no confirmed ecidence that any are actually in receipt of Gift Aid.

So I would imagine that the decision is one that will not only be upheld, but more likely prove the rule from now on.

[Dave Atkinson]

Hi

I'm still out of the country but on the net.

The only club I know that has successfully qualified under the HMRC scheme is Staffs and South Cheshire Woodturning association.

They are an affiliated branch and this is their website www.sscwa.co.uk

Try getting touch with them.  If you are an AWGB Branch then you can only claim gift aid on the branch membership, not the AWGB membership.

Hope this helps

Cheers Dave

[Don Donaldson]

Hello All,  I am Treasurer of Test Valley Turners and after a lot of hassle (really a lot) I successfully obtained Charitable Status for our club from HMRC late last year.  However on putting in a Gift Aid claim it I was informed that membership subscriptions don't qualify "if it gives the member rights to personal use of the charity's services or facilities" Clearly in the case of our club, and I suspect in the case of all woodturning clubs, that is exactly what members subscriptions are intended for.  Additionally after they reviewed our Constitution we were informed that our Charitable Status had been removed because "on dissolution any remaining assets are to be distributed amongst the members"  This would seem to be fairly normal condition for any type of club and we would have had to amend our Constitution to give away all our assets to charity on dissolution, in order to regain our Charitable Status.

As it appeared certain that our membership subscriptions did not qualify for Gift Aid anyway we decided to quietly walk away from the whole issue.  Much time and effort spent for no return in the end!!  I'm sure that it would be possible to "present" members subscriptions as "donations" but it would not be within the spirit of the law even if it was possible to present it as (possibly) legal.  "If it looks too good to be true then it probably is" was certainly the case here!

I hope this helps any Club Committee who are considering applying for Charitable Status in the hope of claiming Gift Aid on subscriptions.  Any further help - ddonal3530@btinternet.com.

Regards

Don Donaldson 

[Robin Goodman]

Thanks everybody for your input.   It seems clear that from now on woodturning clubs have almost no chance of claiming Gift Aid on their members’ subscriptions.   The recent changes in the rules & regulations seem to have been the final nail in the coffin.    Clubs at least now know that they are not missing out on a potential  boost to their income by not applying.

Good luck to the Association for a successful outcome to their application.