What is Gift Aid, and how does it work in the UK?

Jar full of pennies with the word give written on it

Gift Aid is a government scheme that allows a charity or a CASC (community amateur sports club) to claim an extra 25p for every £1 that they receive in a donation without any extra cost to the donor. This means that if £1 is donated to a charity and Gift Aid is claimed, that charity will receive £1.25.

What does a charity or a CASC need to do to claim Gift Aid?

A charity or CASC can claim Gift Aid donations from individuals when the donor has paid the same or more in income or capital gains tax that year and made a Gift Aid declaration that gives permission to claim Gift Aid.

The declaration form needs to include a description of the gift, the name of the recipient, the donor’s full name and home address. If it is a cash donation, the declaration can be on a donation envelope.

When can Gift Aid not be claimed?

Gift Aid cannot be claimed by a charity or CASC:

On donations from limited companies
On donations made through payroll giving
Where a payment is made for goods or services
Where the donor gets a benefit from the CASC or charity over a certain limit
On a donation of shares
From charity cards or vouchers (e.g. charity aid vouchers)
On membership fees to a charity or CASC
On donations received before the organisation is recognised as a charity or CASC

Small donations Gift Aid scheme

If the donation is less than £30 and made either by a contactless card or by cash, you may still be able to claim Gift Aid without a declaration. To do so, the charity or CASC must have claimed Gift Aid in the same tax year as they want to claim small donations of Gift Aid and must not have received a penalty from HMRC in the last two tax years.

The value of a small donations Gift Aid claim cannot be more than ten times a standard Gift Aid claim.

How to claim

Records need to be kept of all donations and when they were made. You can claim Gift Aid using HMRC’s Charities Online or in the post using form ChR1. You need to claim a donation within four years of the end of the financial period in which it was received. This will be:

The tax year if you are a charitable trust; or
Your accounting period if you are a CASC, a charitable incorporated organisation or a charitable company.

You will need to keep records of these donations for two years, and you should ordinarily receive the money by BACS within four weeks if claimed online and five weeks if claimed by post.

For more information or to discuss how our charities team can help you, contact Samantha Pritchard on 0191 211 7905 or email [email protected]

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