How To Claim Gift Aid On Charity Donations - HMRC Rules & Guidance, Including 14 Different Types, Records, Declaration Forms & Retrospective Claims

Each year, UK charities fail to claim £600 million in HMRC Gift Aid. This simple Gift Aid guide provides guidance on the HMRC rules - including 14 different ways to claim Gift Aid, the Small Donations Scheme, declarations, records and retrospective claims, with links to everything you need to claim yours.

Make Sure You Charity Doesn't Miss Out

Charity Excellence gives you everything you need in one place - it's simple, quick and completely free.  Eight online health checks, the Funding Finder database and huge resource base, including 50+ downloadable funding lists. 

And, once you've completed all 8 questionnaires (half a day), run 'Tax Reliefs' as a query and it'll find which you're not claiming yet and link you to the resources you need to claim yours. 

To find the free help and funding you need – Register Now

 

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 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. 

Are You Claiming All The Different Types Of Gift Aid You Could Be?

There are a whole range of different ways to claim Gift Aid.  Here are 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. 

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

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) or orally (in person or by telephone).  The declaration must include a description of the gift and the:

  • name of your charity or CASC. 
  • donor’s full name
  • donor’s home address (at least their house number or name and postcode)

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. 

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.

  • 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 form on file. For those that haven't, invite them to sign 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. 

Access All The Free Resources

Find funders using the Funding Finder database and 50+ funder lists.  Health check your charity in half a day, access the huge resource base, including 100s of organisations that provide free help and resources, and achieve the Quality Mark.

Fast, Simple And Everything Is Free.

To find the free help and funding you need – Register Now

Get Professional Help, If You Need It

I'm Scottish, so finding ways for you to claim money off the Government is something I'm enthusiastic about.  However, I'm not an accountant, so not professionally competent to offer tax advice, besides which it depends on your circumstances. This guide will help you to identify opportunities you may have missed, but it's not professional advice.   

The questions are phrased brilliantly - challenging how we prioritise our management time." Ecosystems Knowledge Network

Register Now