Adjust that tax claim at your peril

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This is perhaps more of a rant than anything else but after being so pleased with the way Blackbaud introduced Batch into the RE:API I now found myself stuck with another piece of Raiser’s Edge functionality that I am less than pleased with.In the UK Gift Aid is big business. In the States (and possibly elsewhere) the donor can claim tax back from charitable donations. In the UK it is the charity that can claim the money back from the government for UK tax payers so this can amount to a very large sum of money if it is handled properly. There have been several changes to Gift Aid over the past four or five versions of Raiser’s Edge. One problem that was not addressed until recently was when Gift Aid had been taken in error and then claimed back from the Inland Revenue. If a gift was given in error then the Gift must be adjusted or written off and the Gift Aid must be reversed. If the Gift Aid was claimed in error (for example the donor was not a tax payer) then the Gift Aid alone must be reversed.

Without the complication of Gift Aid you would normally adjust the gift or write it off. With Gift Aid Blackbaud introduced a whole new procedure. The gift is “archived” (it can only be seen if you change a filter setting) and a new gift can optionally be created to replace it whereby you can adjust the values on the new gift. The archive gift remains in the system so that there is an audit trail but does not show up in reports other than Gift Aid reports.So what are the problems?

  1. In general this is a whole new process for adjusting a gift. It is very different from regular adjustments and you have to think about which type of adjustment needs to be made.
  2. There is no link between the archive gift and the replacement gift (would it not be logical to have a “goto” arrow so that you can move between the two). The system Id of the archived gift is given in an attribute (see next point). How useful is the system ID when the only way of looking that up is using a query. What is more the link already exists. There already is a new field of replacement gift id. When a donor calls up and wants some information about their gifts the user now how to go to query to look up the history of the gift and can no longer do it from the gift screen.
  3. There is link information stored in attributes which are set up when you adjust the tax claim. However these attributes can be deleted and indeed the table entries can also be deleted (granted they are put back in when you add another adjustment). It just does not seem like a robust solution.
  4. Perhaps the worst problem is when you need to adjust a payment in a recurring gift. For example if a person paid tax in the UK, moved abroad and then came back, continued to pay the recurring gift throughout based on their original Gift Aid Declaration, then those transaction in the middle will need to be adjusted. They can be adjusted using the Adjust Tax Claim facility but then the gift cannot be reapplied to the correct transactions!

Point three is a real show stopper for many organisations.What I don’t understand is why the tax claim adjustment process wasn’t built into the existing adjustment functionality. There is essentially no difference between the two processes. The new functionality adds a tax refund claim field on the archived gift. This could clearly have been added to an adjustment if Blackbaud had decided to use the original adjustment mechanism.I understand why they did it from a software development point of view. The majority of their user base will not use this functionality so why change something that works well? The problem is that a large minority of their user base will use this functionality and will struggle with it.I have a suspicion that Blackbaud are much more confident in adding new gift functionality (the adjust tax claim menu item) than changing existing adjustment functionality together with changing the Gift Aid reporting mechanism. What a shame and what a waste. Let’s hope Blackbaud correct this for the better and soon.

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5 thoughts on “Adjust that tax claim at your peril”

  1. Pingback: Adjust Tax Claim Functionality (UK) - Blackbaud User Society - Forum

  2. The example that I gave in the posting above was quite specific. It relies on the fact that a donor is out of the country i.e. not paying UK tax for a period of time. However the problem is also encountered when you want to change the fund, campaign or appeal (or in fact any field that is normally adjusted not just simply changed). Whenever there is a tax claim on the gift you have to use the tax claim adjustment process.

    A client of mine had a meeting with Blackbaud about these issues. I was not at the meeting but from what I understand Blackbaud had said that it was never actually their intention to remove the ability to use the regular adjustment process for non-Gift Aid related changes. (This raises questions about their QA process). They said that they were aware of the recurring gift issue now and that they would look into. They also suggested that links between gifts were not really that necessary. After all it was only two clicks away to the other gift. They also said that they were very busy and that it would probably not be fixed until the next release i.e. 7.84! Apart from that they said that they were pleased with the way it was working. They had spent a long time consulting with HMRC and they too were please with the process.

    It is all very well that Blackbaud spent such time with the HMRC. The last thing we would want is for the process not to be legal. However the HMRC do not have to use Raiser’s Edge. They just need the reports it provides. It is a shame Blackbaud did not consult more with their clients about the whole process.

  3. Without understating the complexity of the process David our database handles this very easily.

    It also handles many of the HMRC rules and regs.

    We would be happy to discuss all things software / gift aid

    Kind regards

    Ms Phil Robson

  4. Phil,

    I don’t know your software but it is certainly interesting to see software dedicated to Gift Aid. The problem is that while it is certainly good at dealing with Gift Aid it may not cover the other areas a good fundraising software needs. This leads those who use your software with the dilemma of needing to integrate with their fundraising system.

    As it happens the latest release of Raiser’s Edge from Blackbaud while perhaps not the most elegant of solutions does make it much easier to work with Gift Aid than earlier versions. They have solved point 4 above (which in many cases was a show stopper). Clearly I am unable to compare to other software as I am not familiar with other software but they are certainly getting there (just slowly).

  5. Totally agree David, we dont set ourselves up to compete with the likes of Raisers Edge or other fundraising databases.

    Many charities actually dont need the sophistication that fundraising databases offer. There is room for mamy flavours.

    I would also say that our database compliments any fundraising database by concentrating on its core delivery – accurate Gift Aid/Tax claims by inbuilding HMRC rules and regulations.

    However recording Gift Aid is the only income stream that leaves charities open to direct penalties from HMRC.

    Having been involved with the development of Gift Aid RE from v7+ to V8+ I totaly understand the issues that RE has faced in developing its Gift Aid moudules.

    Personally I feel RE is a robust piece of fundraising software. I also feel it adequately fulfills its place as a fundraising tool.

    Phil

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