Gift Aid

Gift Aid is the easiest way to increase donations to your charity by nearly a third at no cost to your donor. All you have to do is ask donors for permission to reclaim the tax they have paid to HM Revenue & Customs.

Each year, charities raise over half a billion in Gift Aid tax relief. We are here to help you make your claim.

Updates:

Visit www.giftaidhelp.org for expert help with all your Gift Aid questions!__________________________________________

Changes implemented in the 2008 budget mean that transitional relief will be paid automatically on Gift Aid claims from 1st August 2008. Gift Aid claims made between 6th April 2008 and 1st August 2008 will receive backdated transitional relief payments in due course. For more information see our briefing or contact the tax-effective giving team.

Your own Gift Aid Calculator

You can download the Gift Aid Calculator on this page and brand it with your own logo. It can be placed on your website or distributed as a standalone Mac or Windows application.

See our downloads area for more details...

What is it?

Gift Aid is a simple scheme that enables charities to claim an additional 25p from every £1 donated by UK taxpayers. In addition to this, the Government will provide Transitional Relief of 3 pence on the pound. So while charities will claim 25p from each £1 donated, they will actually receive 28p until the 2011 tax year. Charities of all sizes are encouraged to make the most of Gift Aid to increase income to their organisation and to apply the Gift Aid logo to their fundraising materials.

* Changes to Gift Aid following the 2008 Budget*

In addition to Transitional Relief, there have also been some administrative changes to Gift Aid and the audit process.

Click on the appropriate link for HMRC guidance on administrative changes and transitional relief.

Click on the appropriate link for Institute of Fundraising guidance on administrative changes and transitional relief.

How does it work?

Gift Aid can apply to one-off donations, or those over a specific period. It can even be backdated for up to 6 years (4 years from April 2010). It can apply to sponsorships and certain membership fees.

On top of this, higher rate taxpayers are eligible to reclaim 25p from the taxman for every £1 donated to charity by including details of their donations on their Self Assessment form. This rebate can be donated directly to a charity of their choice on the same form and if the donor chooses to do so it can be increased further through Gift Aid.

To calculate the value of your donations with Gift Aid, use our Gift Aid Calculator on the left of this page.

Declarations

A Gift Aid declaration can be made either in writing or orally and may cover donations made since 5 April 2003 and all future donations. The donor needs to understand that they are giving you authority to reclaim tax from HM Revenue & Customs on the gift.

Click here for a model declaration and here for a model Gift Aid sponsorship form.

Promoting Gift Aid to your Charity and Donors

Once you have registered with HMRC and started using Gift Aid, it's important to maximise its potential. This means communicating it to your donors and building awareness within your organisation.

Our downloads page has a number of items which will help you get the Gift Aid message out. including:

Institute Briefings on Gift Aid

The Institute has created a series of briefings that are designed to answer questions around various tax effective giving schemes and how they are applied in practice. Click on a link below to learn how you can maximise the Gift Aid potential of specific fundraising techniques.

Time Limits for Gift Aid Reclaims

The Budget on the 12th of March 2008 made a number of significant changes that affect tax-effective giving. Among some of the more important changes was the lowering of the basic rate of tax from 22% to 20% and the knock on effect on the amount claimed on Gift Aid. However, Transitional Relief was introduced for three years to allow charities to receive the same amount.

For more information, see our Fact Sheet on the topic.

Charities must be aware that there are time limits for making Gift Aid tax claims. Gift Aid claims must be completed within the time limits outlined below:

A charity that is a registered company must consider the '6 year rule' on all Gift Aid tax claims. The charity must make a Gift Aid tax claim within six years from the end of the accounting period to which the claim relates.

A charity which is classified as a trust for tax purposes must make any claim within 5 years of 31 January in the year following the end of the tax year to which the claim relates.

However, from April 2010, these limits will reduce to just 4 years - so make sure that you get your claims in before this date!

New Rules for Gift Aid on Visitor Donations

New HMRC guidelines for Gift Aid on charity visitor donations come into force in April 2006. The new rules will give more charities the opportunity to claim Gift Aid on visitor donations.

For more information, see our Fact Sheet on the topic.

Charity Challenge Events and Gift Aid

Many charities raise funds via sponsored events and challenges, using Gift Aid to maximise the money raised. However, there are specific circumstances under which certain donations may become ineligible for Gift Aid, and charities should be aware of these.

Click here for a model Gift Aid sponsorship form.

For more information, see our Fact Sheet on the topic.

Charity Auctions

Auctions are a great way for charities to raise money, and with the proper use of Gift Aid, the funds can be maximised to their full potential. Under certain circumstances, it is possible to treat all, or part, of the purchase price as a donation.

For more information, see our Fact Sheet on the topic.

Frequently Asked Questions

How do I store Gift Aid records? What is the Benefit Rule? What is a connected person? How do I 'buy the benefit'? These and other questions are answered in this helpful general briefing.

For more information, see our Fact Sheet on the topic.

Membership Subscriptions

The way to make your membership subscriptions tax-effective has changed. Gift Aid is available to those membership schemes that meet certain criteria. Check to see whether or not your members can make their subscriptions go even further.

For more information, see our Fact Sheet on the topic.

The Benefit Rule and Connected Persons

Sometimes donations can be accepted, but not Gift Aided. At other times donations from one party are eligible for Gift Aid, but not from another party. This is often due to the rules on benefits and connected persons.

For more information, see our Fact Sheet on the topic.

Registering for Gift Aid

In order to take advantage of Gift Aid, you must first be recognised by HM Revenue and Customs as a charitable enterprise for tax purposes. This is not the same as being registered with the Charity Commission.

For more information, see our  Fact Sheet on the topic.

Need More Help?

For further information, please consult the following HMRC documents or call the HMRC Charities helpline on 0845 302 0203.