HMRC have recently highlighted that charities can only claim gift aid on cash donations. If your charity receives goods there is no gift aid available at that point. However, HMRC make clear that when the goods are sold, the donor can be offered the cash generated, and if the donor chooses to allow the charity to keep the cash, then this is a cash donation. At this point, if the process has been followed properly, gift aid can be claimed.

David Wilsdon