HMRC Charity Gift Aid Rules - Guidance On What It Is & How To Claim It, Including Declaration Forms & Small Gift Aid Scheme

This resource summarises the HMRC Gift Aid Rules for charities and provides guidance on what it is and how to claim it, including the 14 different ways to claim Gift Aid, the Small Donations Scheme (GASDS), declarations, records, how far back a charity can claim, limits, with links to everything you need to claim yours.

HMRC Charity Gift Aid Rules & Guidance

There are a whole range of different ways to claim HMRC charity Gift Aid.  Here are the rules and guidance for the ones most likely to apply to you.

  1. Charity auctions, when a person purchases a lot at a charity auction intentionally pays more than it is worth.
  2. Charity events, by charging a set ticket price (on which Gift Aid cannot be claimed) and, in addition, requesting a donation that can be gift aided.
  3. Digital giving and social accounts, including social media and fundraising websites.
  4. Contactless payments, under the Gift Aid Small Donations Scheme- see below. 
  5. Donated goods, in certain situations, Gift Aid can be claimed on the income from the sale of supporters’ goods.
  6. Adventure fundraising events, sponsorship payments are eligible for the Gift Aid Scheme provided all the normal requirements of the scheme are satisfied.

But, there are lots of others that might also be claimable - free admission to charity property, membership subscriptions, church collections, educational trusts, educational school trips, volunteer expenses, waived refunds and loan repayments, split payments, and even missionaries and other full-time workers

See below for the Gift Aid Small Donations Scheme and companies claiming Gift Aid. 

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Claiming HMRC Gift Aid Encourages Your Supporters To Donate

Gift Aid, can be claimed by charities on donations from eligible donors; essentially UK tax payers.  HMRC adds an additional 25p for every £1 they donate.  

And there's more. 

  • In a CAF survey in July 2020, four in 10 of those who already donate money to charity, said Government incentives such as top-ups make them more likely to give.
  • For those that pay above the basic rate of tax, they can claim claim the difference between the rate they pay and basic rate, on their donation, effectively making the amount they pay you lower.  

There is no upper or lower limit of the amount someone can donate, or you can claim - except, the Small Donations Scheme.  See the section below for details. 

It's Not Just Registered Charities That Can HMRC Claim Gift Aid

You don't have to be a registered charity to claim Gift Aid.  It can also be claimed by unregistered charities (unincorporated associations) and community amateur sports clubs (CASCs).

But, you have to be registered with HMRC. Not registered? Here's my guide on how to do so and you can make a claim up to 4 years retrospectively; of the end of the financial period you received it in. 

Claiming Under The Gift Aid Small Donations Scheme (GASDS)

For donations over £30, donors need to sign a Gift Aid declaration, which must be retained on file.  But for small donations you can claim for donations of up to £30, with less administration, using the Gift Aid Small Donations Scheme (GASDS).  For example, collections tins and bucket collections, including donations made using contactless technology, such as a contactless credit or debit card.  

You do not need to know the identity of the donors or collect Gift Aid declarations, but you must have claimed Gift Aid in the same tax year as your GASDs claim.  You can't only make a GSADS claim.

The maximum amount you can claim is the lower of £8,000, or 10 times the amount you receive in Gift Aid donations. 

But, there is a way to claim more.  If you’re a charity with 2 or more community buildings, you can claim a maximum of £8,000 on either, small donations collected anywhere in the UK, or for each community building collected in the same Local Authority area.

Companies Claiming Gift Aid

Gift Aid donations made to charities and CASCs by companies are paid gross and so, unlike the individual Gift Aid Scheme, no tax is repayable to charities or CASCs. For a charity or CASC the donation is treated as potentially taxable income, but is exempt from tax.

Companies wholly owned by a single charity or by 2 or more charities, or partly owned, can claim Gift Aid donations, but special rules apply. 

Gift Aid Declarations & Forms

Except for the small donations scheme (under £30), for a donation received from an individual, you must have received a Gift Aid declaration from the donor.  Gift Aid declarations can be in writing (including by email, or text message), orally (in person or by telephone) or online.  There is no set design for a declaration form or a verbal declaration, but these must include specific information

You can download example Gift Aid declaration forms for one-off donationsall donations and sponsored events.

CAF survey in 2022, found that nearly a quarter of eligible donors don't use Gift Aid.  Don't miss out!  Make sure that you have processes to ensure that those involved in Gift Aid understand the benefits and consistently encourage eligible donors to sign their Gift Aid declaration form. 

Generally, you must keep declaration records for 6 years from the end of the accounting period they relate to, but there are some exceptions

How To Claim Gift Aid On Charity Donations

Here’s step-by-step guidance to claiming Gift Aid, here's how to submit your claim online and here's a Gift Aid FAQs and common mistakes list to help you.

If you're a registered charity, but aren't yet registered with HMRC, here's my guide on how to do so.

How Long Must Gift Aid Records Be Kept?

The time limits for keeping Gift Aid records depend on how the charity is treated for tax purposes, but for most it's 6 years after the end of the accounting period they relate to.  However, for ongoing doinations you'll need to keep the enduring Gift Aid declarations, no matter how old it is.

Claim Even More - Retrospective HMRC Gift Aid Claims

The HMRC example declarations include in the statement that donations may be claimed up to 4 year's retrospectively.  You need to claim for a donation within 4 years of the end of the financial period you received it in and on cash donations under the Gift Aid Small Donations Scheme within 2 years of the end of the tax year that the donations were collected in.  Do you have donors from the last 4 years, who haven't made a declaration, but who might if you asked them?   

  • Most Money Option.  Create a list of all UK tax payers who have made a donation to you in recent years and check if they have a valid Gift Aid declaration record. For those that haven't, invite them to make one.  Then check if you've been claiming for their donations over the last 4 years.  If you have, at least you're now legal and, if not, claim the restrospective funding.
  • Lower Workload Option.  Repeat the process, but only for donors who have made substantial donations. 

If you think that sounds like a waste of time, I spoke to someone who carries out large scale Gift Aid audits. The largest amount he's found so far was £0.7 million. 

And Gift Aid Is Just One Of Many HMRC Charitable Tax Reliefs

Here is a list of the others, with links to the guidance you'll need to claim these. 

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