Advice on handling monies from Fundraising

Hi members

Just hoping to get some advice and guidance for a friend. Her little boy has cerebal palsy and the family are looking to fundraise £50k to send the little fella to America to undertake surgery that will hopefully prevent future use of a wheelchair.

The family understand that because the funds to be raised are only for the benefit of one person, that a charity cannot be set up, and as such the donations will not be eligible for gift aid.

I have concerns that if donations are being recieved just in to a paypal account in the parents name that this will be counted as taxable income, further eating in to the funds required for the operation.

I would be most grateful if someone who is experienced in fundraising issues could advise on the best practice for handling funds intended as a donations. What is the best way to ensure that this is kept separate from the family's personal finances from a tax point of view, and also to ensure that the maximum benefits and taxable allowances are claimed.

Thanks in advance for your help

Uknitty (Student Member)

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Donations/gifts are not taxable. As long as the paper trail is very clear that these are specific funds for their boy, from fundraising, I can't see this being a problem.

    I would try to open a separate bank account in the "charity" name (e.g. Billy's American Surgery Fund").

    Shame on the gift aid.

    I can't think of any other issues at present.
  • PGM
    PGM Registered Posts: 1,954
    Wonder if you can contact the gift aid team and try and get a rulling on the matter?
  • uknitty
    uknitty Registered Posts: 591
    Thanks guys for your advice.

    To reclaim gift aid you either have to be registered as a charity with the charities commission (and fundraising for one person does not qualify for charity status)

    OR

    Your charity has to earn under £5000. I wondering if this second option means is anyone who is setting up an event with the intent to provide those funds as a donation can reclaim gift aid as long as they don't raise more than £5,000 ?
  • gallow
    gallow Registered Posts: 6 Regular contributor ⭐ 😼 ⭐
    Can't the parents attach the fundraising to some existing charity? that would see gift aid being used and the issue of separate funds.

    Mike
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