Couple of charity tax related questions

Casey1709

My DD1 wants to go on Operation Wallacea (http://www.opwall.com/ ) with her school next summer. Estimated cost is £2k. About £1k to Operation Wallacea for local accomodation, meals, between £600 and £900 for flights and £100 - £200 on personal kit (rucksack, boots, wetsuit).

We had the first meeting last night with the school and OpWall fundraisers. Raising the money appears to be a fairly integral part of the whole OpWall experience and I think my DD needs to appreciate how much money this trip will be so must raise most of the funds herself.

I asked the OpWall reps a couple of tax questions but was underwhelmed by their waffly answers (suspect it was just outside of their remit). So I thought MSE would be a good place to ask for help.

As both the school and OpWall are registered charities, should any sponsorship or donations be sought as giftaid? (I'm thinking yes but am unsure how we get this value back from HMG.)

The school will book the flights all together, can we claim back any of the taxes (or VAT?), again either through OpWall or the school's charity staus? (Again I'm thinking yes but I don't know how to go about getting the value back to put against the trip).

Thanks in advance.

fengirl_2

In order for the donations to attract Gift Aid, the donations will have to be made directly to the school or OpWall. You would therefore need permission of either organisation to do this - are they prepared to do all the admin work this entails?
Contrary to popular opinion, charities are not exempt from VAT or flight taxes. They are only exempt from incme tax on their surpluses.
By the way, OpWall has not submitted its last two years' accounts to the Charity Commission, tsk, tsk. If it was my daughter, I think I would be asking them for copies of these accounts.

Casey1709

Many thanks for your reply fengirl. I am surprised that charities can't claim back VAT and other taxes.

I'm going to suggest the school asks for all payments to it for all trips to be made giftaid, that could raise an awful lot of money (900+ pupils doing 1 or 2 things a year).

Do all other charities send in their accounts on time or is there something else about OpWall I'm missing? I'm not sure I'd be able to read their accounts if they gave me a copy.

fengirl_2

Most people are surprised that charities pay VAT!
I'm not sure what the %age of defaulters there are in terms of late returns to the CC but the rules are quite clear and all charities must know that they are required to file their annual return and accounts withn 10mths of their year end. They are sent the annual return as a reminder. The CC does not have the resources to chase up all defaulters, but every so often it has a blitz.
As a funding adviser, I would always advise clients to make sure their returns are up to date and as an ex-funder, I always used to check that an applicant's returns were up to date. I think having two years outstanding usually shows sloppy governance, rather than malfeasance.
You can ask OpWall for copies of the outstanding accounts and they are required to supply these within 30 days. The reason I think the accounts are important is that there is a similar organisation which is carrying a large deficit which the fundraising activities carried out by the young people currently hoping to go on a volunteering experience is effectively covering.

redpete

Casey1709 wrote: »

I'm going to suggest the school asks for all payments to it for all trips to be made giftaid, that could raise an awful lot of money (900+ pupils doing 1 or 2 things a year).

You can't count payments for trips as charitable donations; the reason is that the child gets a direct benefit from the payment. Similarly you can't gift aid payments for scouting activities such as camps (but you can for regular subscriptions).

fengirl_2

Yes, I overlooked this - redpete is right.
I think thats how the organisation I mentioned in my last post got into trouble.

mountainofdebt

Casey

where is your DD1 planning to go with Operation Wallacea?

My son went to S Africa with them this year so perhaps I can help with any questions you may have

Casey1709

Thanks for the replies guys.

Is there somewhere that explains that donation vs direct benefit rule? I only ask as we went to a working museum a couple of years ago and they asked us to pay our entrance fee as giftaid, although they said we could visit even if we didn't pay (don't want to say which one in case it gets them in trouble).

DD is hoping to go to Cuba, measuring wildlife numbers in mangrove and reef habitats (Have to say I'm quite jealous).

I've asked for a copy of their accounts but no reply to my email yet.

fengirl_2

You have answered your question yourself. The museum effectively gives free entrance, so that the fee you paid can be treated as a donation. The money your DD is paying is in exchange for a 'service' - there is not the option to go for free. It will be used to pay for flights, accommodation and the training and support she will receive.

Casey1709

I'm not sure I follow. Today, DD1 has brought home a form for a trip to London in Dec to see some Biology lectures and the parental permission part says contributions of £28 to cover entrance, train, insurance etc. Except it goes on to say no student will be excluded through an inability to pay. So, the trip is effectively free, or those that pay are also paying for other kids so surely that is a donation?

I'm probably missing something completey simple in the explanation?

Savvy_Sue

The trip to London is part of the school curriculum. The trip to Cuba isn't.

Schools aren't allowed to exclude pupils from any part of the curriculum if they don't pay. Either those who do pay are subsidising those who don't, or there is a fund to cover the shortfall - my boys' school had an 'Enabling Fund' which parents could choose to donate to, and the PTA topped it up too.