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A simple explanation of the HMRC Gift Aid rules for charities and guidance on how to claim gift aid as a charity. How does Gift Aid work, how far back can you claim Gift Aid (time limits), and who can claim? Including claim time limits, declaration forms, Gift Aid Small Donations Scheme (GSADS), donations, retrospective claims for previous years, with links to everything you need to claim yours. And it's not only registered charities that can claim Gift Aid - there's a section on who can claim Gift Aid.
There are a whole range of different ways to claim Gift Aid. Here are the HMRC rules and guidance for the ones most likely to apply to you.
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 (GASDS) and companies claiming Gift Aid.
Here's a very helpful blog by the RSPCA on steps you can take to maximise your HMRC Gift Aid claims.
Complete the 30 min online health checks for Income and Finance & Resources to make sure you're maximising your Gift Aid by claiming all the different types of Gift Aid your charity is entitled to and to find all the many other charity tax reliefs you could be claiming, with links to the guidance to claim everything you're entitled to. Run Tax Reliefs in the query system, once you've completed the 8 questionnaires.
Plus, use Funding Finder, to find a huge range of grants and Help Finder to find lots of free fundraising support and companies that donations.
Find Funding, Free Help & Resources - Everything Is Free.
You can claim Gift Aid on donations from eligible donors; essentially UK tax payers. HMRC adds an additional 25p for every £1 they donate.
And there's more.
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.
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.
There is no limit on the amount of Gift Aid that a charity can claim, except for the Gift Aid Small Donations Scheme. The maximum amount a charity 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.
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. In particular, historically, HMRC have accepted initials only but they will reject any application where they can't identify the individual, so it's always best to provide an individual's full name.
You can download example Gift Aid declaration forms for one-off donations, all donations and sponsored events.
A 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.
Here’s the HMRC login to claim Gift Aid online and, if you need it, step-by-step guidance to submitting a Gift Aid claim, the HMRC Gift Aid spreadsheet and 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.
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 donations you'll need to keep the enduring Gift Aid declarations, no matter how old it is.
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?
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.
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.
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.
This guide is a short checklist on the HMRC Gift Aid rules, because I know you're all busy. However, for more on how to claim Gift Aid, our friends at Access have created a Gift Aid guide that explains everything a charity needs to know. What is covered in this guide:
Here is a list of other tax reliefs, with links to the guidance you'll need to claim these.
Plus, 50+downloadable funder lists, 8 online health checks and the huge resource base.
Quick, simple and very effective.
Find Funding, Free Help & Resources - Everything Is Free.
To access help and resources on anything to do with running a charity, including funding, click the AI Bunny icon in the bottom right of your screen and ask it short questions, including key words. Register, then login and the in-system AI Bunny is able to write funding bids and download 60+ charity policy templates as well.
This guidance on HMRC Gift Aid rules and claims is not professional advice and is for general information only. 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 Gift Aid tax advice, besides which it depends on your circumstances. This guidance will help you to identify opportunities you may have missed, but it's not professional advice.
