HMRC have highlighted the contents of their guidance on claiming Gift Aid on donations of goods to charity which are then sold by the charity, which perhaps suggests that the correct procedures have not always been followed.

You must get the procedures correct, and as an example Gift Aid applies only to gifts of money by an individual so if a person simply donates goods to a charity, Gift Aid does not apply. Charities cannot claim Gift Aid on donations of any physical items, such as clothes or books. However, in certain situations Gift Aid can be claimed by charities or community amateur sports clubs (CASCs) on the income from the sale of supporters’ goods. That involves getting the paperwork right (sounds familiar?!) and that means the charity or its trading company asking the owner of the goods to donate the sale proceeds to the charity. If the owner agrees to do just that the sales proceeds go to the charity which can then claim Gift Aid on the net sales proceeds subject to all other Gift Aid conditions being satisfied.

Certain conditions need to be reflected in the agreement.

David Wilsdon