Gift Aid

Gift Aid

Please make sure you always gift aid your donations, so that the charity you are supporting can claim an extra 25 pence for every pound you donate. 

On the "Charity of the Month" page there are two forms:

One form for a single donation. Use this if you only intend to donate once.

And a form for regular giving, use this if you are planning to donate more than once. This saves you having to fill out the form every time you donate.

If you pay Income Tax at the higher or additional rate and want to receive the additional tax relief due to you, you must include all your Gift Aid donations on your Self - Assessment tax return or ask HM Revenue and Customs to adjust your tax code. (But more about this on the gift aid page!)

Gift Aid Form's

Multiple Gift Aid Donation - Spreadsheet.xlsx Multiple Gift Aid Donation - Spreadsheet.xlsx
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Gift aid

Gift aid is a system set up by the government which allows charities to claim 25 p per pound on top of certain donations. HMRC are the administrators of this system not the charity commission and as accountants we can act as an agent for your charity. Previously only registered charities used to be able to claim gift but that is now not the case. Gift aid can provide a huge boost to Not For Profit Organisations. Small or Start Up Charities can have their income increased by 25% through the gift aid scheme as often small charities get most of their income from individual donations. As charities grow, gift aid is obviously still a great way of bringing in extra income however with growth often comes new streams of income.

GIFT AID - HOW IT WORKS

INDIVIDUALS

As an individual if you make a donation to a charity you can Gift Aid your donation by filling out a form. This does not cost you any extra (unless you are self employed)but means that the charity you are donating to can claim from HMRC an extra 25p per pound you donate.

CHARITIES

For charities, if they can get people to gift aid the donations it means they can claim 25p per pound of the donation. Once the donation has been received along with the gift aid form the charity can then submit a gift aid return to HMRC who will pay them the 25p Per pound.  

COMPANIES

If a company donates to money to a charity. That charity can not claim gift aid from that donation. However the company can claim tax relief against the amount they donated to charity. The rules for sole traders and partnerships are different. 

GIFT AID - NEED TO KNOW

INDIVIDUALS

You need to make a Gift Aid declaration for the charity to claim. You usually do this by filling in a form - contact the charity if you haven’t got one. (or fill in one of the gift aid forms on the donations page)

You must give a declaration to each charity you want to donate to through Gift Aid. You can include all donations from the last 4 years. But you will need to tell the charity about any tax years where you didn’t pay enough tax.

Paying enough tax to qualify for Gift Aid

Your donations will qualify as long as they’re not more than 4 times what you have paid in tax in that tax year (6 April to 5 April). The tax could have been paid on income or capital gains and you must tell the charities you support if you stop paying enough tax.

If you pay tax at the higher or additional rate, you can claim the difference between the rate you pay and basic rate on your donation. Do this either  through your Self Assessment tax return Or by asking HM Revenue and Customs (HMRC) to amend your tax code.

Example You donate £100 to charity - they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).

CHARITIES

You can claim Gift Aid on donations from individuals. The donor must:

You must be recognized as a charity or community amateur sports club (CASC) to claim Gift Aid.

There are special rules for:

You can’t claim on donations:

  • from limited companies
  • made through Payroll Giving
  • that are a payment for goods or services or made because your charity orCASC bought goods and services
  • that started as loans, but no longer need to be repaid
  • where the donor gets a ‘benefit’ over a certain limit
  • of shares
  • from charity cards or of vouchers, eg Charities Aid Foundation (CAF) vouchers
  • of membership fees to CASCs
  • you got before you were a recognised charity or CASC

COMPANIES  

Charitable donations can’t be used to create or add to a company’s trading losses, nor can excess charitable donations be carried forward or back although they may be surrendered as group relief.

The donor company should keep normal accounting records to support entries on its CTSA return along with any other relevant documentation for example, correspondence with the charity or CASC in relation to the donation such as a ‘thank you’ letter.

When a company makes a qualifying donation to a charity or CASC, the amount paid can be set against profits for Corporation Tax purposes. The company can make a claim in its Corporation Tax Self-Assessment (CTSA) return to set the amount of the donation against its taxable profits, to the extent that it reduces the chargeable profit to nil.

This page uses information taken directly from GOV.UK

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