Gift Aid it!
Supersize your charitable donation
Gift Aid is an excellent way to maximise the value of your donation to your chosen Charity. Gift Aid helps charities significantly increase their available funds and continue their amazing work. Yet, the full potential of Gift Aid is not used by Donors, meaning charities are losing out on valuable income. For whatever reason this may be, I hope this blog helps answer any questions you may have and hopefully results in bolstering your future donations!
Paula O’Pray, Trainee Solicitor, Gebbie & Wilson LLP
What is Gift Aid?
Gift Aid is a scheme set up by the Government which allows charities to claim a tax relief on the donations made to them.
The assumption behind the scheme is that when donating, individuals are doing so with their post-tax funds. Therefore, each time you donate, the charity can make a Gift Aid claim. This essentially allows the charity to claim your basic rate tax (20%) back from HM Revenue & Customs (HMRC).
For example, if you make a £100 donation this could be upped to £125 with Gift Aid.
Higher/additional rate taxpayers can claim further relief through self-assessed tax returns at the difference between basic and marginal rate of income tax.
How Can a Claim Be Made?
To benefit from the scheme, the charity must:
- Be a HMRC registered charity.
- Obtain a Gift Aid declaration – unless the donation is under £30.
- Maintain records of donations made.
For a donation to qualify, the Donor must:
- Make a qualifying monetary donation.
- Pay income tax.
- Make a Gift Aid declaration.
- Be an individual, sole trader or a partnership – there are separate rules for companies.
- The donation must come from your own funds.
Higher Rate Taxpayers
If you pay a higher rate of tax, you can claim additional tax relief on your donations made to a charity. This is in addition to the basic rate already claimed by the charity.
You can do this by filling in a self-assessment tax return and enter the details of your Gift Aid donation at the charitable giving section of the form. Remember to keep records of all gift-aided donations made.
Why Should I Use Gift Aid?
Donations bolstered by Gift Aid contribute massively to the funds available to charities.
By the end of the tax year in 2023, £1.6 billion was raised through Gift Aid.
Considering almost half of taxpayers don’t utilise the scheme, charities are losing out on valuable income they can put towards a good cause.
How do I Make a Gift Aid Declaration?
Making a Gift Aid declaration can be as easy as ticking a box on a donating page.
Other methods include filling out a Gift Aid Declaration Form, which can look like this:
If using these forms, please do so carefully and ensure that all information is correct. If any information is missing the charity won’t be able to claim Gift Aid.
Make your Donations Go Further
So now you know the basics of Gift Aid and how you can maximise your donations to help your chosen charity continue their amazing work.
So don’t forget to tick the Gift Aid box and help raise extra £££’s for a good cause!