The vast majority of charity retailers are either operating on Gift Aid Method A, or Method B. HMRC have a full guide here to the 2 schemes and their differences, but in a nutshell; If your charity operates the charity shops itself, you’ll be Method A, and if your charity shops are run by a commercial subsudiary or trading arm, you’ll be Method B.
With Method A, you can claim up to £100 of donated goods sales per donor within the current tax year without contacting them to inform them of this (until the tax-year end). With Method B, the limit is £1,000, so you can claim up to £1,000 of donated goods sales per donor within the current tax year without contacting them.
You will likely already be familiar with the end of year Gift Aid letters that you have to send out to all donors who you have sold £20 or more of donated goods for (see guide here). Most charities will do this quickly at the end of the tax year, and any Gift Aid unclaimed will then be able to be claimed, as detailed in the guide.
However, we receive a lot of questions from people asking why there are people showing in awaiting contact when it is not the end of the tax year. The simple reason is that the donor(s) in question are already over the respective limit for your Gift Aid method for the CURRENT tax year, so you won’t be able to claim until you contact them. You can follow the same end of year process at any time within the year if you find you’re unable to claim large amounts for given donors because you’re selling a lot of their items, but you can also just wait until the end of the tax year when they’ll be contacted anyway as part of the annual process.
Aside from the fact that HMRC require you to send the letters out promplty each tax year, it’s really beneficial to send them quickly because if you do so, it’s highly unlikely they’ll go over the limit for the current tax year before you’ve made a claim for them. If someone is over the limit in the current year, a claim for previous years won’t go through either until their status is cleared to be not awaiting contact again.
It’s also worth noting that you can email people, rather than sending them a printed letter. So it’s really worth capturing your donor’s email addresses when you sign them up to your Gift Aid scheme!
The above also applies when you see an error in the Gift Aid Failed report where is states ‘Awaiting Contact with Donor’. This is where you have tried to submit lines for people that are blocked as above.