Gift Aid: Why, what and how
Gift Aid is an easy way for individual donors to boost their charity donation at no extra cost to them or the charity they support.
WHAT IS GIFT AID?
Gift Aid means charities and Community Amateur Sports Clubs (CASCs) get an extra 25p for every £1 donated. Gift Aid is a scheme which allows charities and Community Amateur Sports Clubs (CASCs) to claim from HMRC, the basic rate of tax their donors have paid. Gift Aid increases the value of donations by 25%, so it means even more money goes to the causes you care about – and it won’t cost you extra.
To make sure that we can receive this extra donation, you only need to complete one Gift Aid declaration (GAD) and we’ll arrange for the Gift Aid to be collected. Likewise, if your circumstances change and your donations are no longer eligible for Gift Aid, you just need to let us know, and it saves you the time and admin of contacting each of the charities you support directly.
IS MY DONATION ELIGIBLE FOR GIFT AID?
The charity can only claim Gift Aid on monetary donations from your own funds, and if you’ve paid UK Income and / or Capital Gains Tax during that tax year. The tax you pay in that tax year must be at least equal to the value of Gift Aid the charity or CASC will claim on your donation(s).
If you stop paying enough tax, it’s important to tell all of the charities you’re donating to. If you don’t let them know, and you pay less tax in the tax year than the amount of Gift Aid they’re claiming, you will need to pay any difference back to HMRC.
Donations made with a company’s money or other peoples’ money, including amounts raised through fundraising (eg a bake sale) are not eligible for Gift Aid and you must not request Gift Aid be claimed by the charity on such funds.
HOW DOES GIFT AID WORK?
For a charity to claim Gift Aid on your donation you need to make a Gift Aid declaration (GAD). The GAD confirms you’re a UK tax payer and that Gift Aid may be claimed on your donation.
What if I’m a higher rate taxpayer?
If you pay tax above the basic rate, you can claim the difference between the rate you pay and the basic rate on your donations. The same applies if you live in Scotland. You can either claim the difference through your Self Assessment tax return or by asking HMRC to amend your tax code.