How To Claim Gift Aid - HMRC Guidance and Gift Aid Rules for Charities

How To Claim Gift Aid - HMRC Guidance and Gift Aid Rules for Charities Explained Simply - Limits, Declarations, Small Donations & Everything Else

How To Claim Gift Aid - HMRC Guidance and Rules for Charities

How to claim Gift Aid with a simple explanation of the HMRC guidance and Gift Aid rules, including all the different types, limits, declaration forms, Gift Aid Small Donations Scheme (GSADS), donations, retrospective claims, companies claiming Gift Aid and records, 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.

HMRC Gift Aid Guidance - Types of Claim

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.

  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, you can claim Gift Aid 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 propertymembership subscriptionschurch collectionseducational trustseducational school tripsvolunteer expenseswaived refunds and loan repaymentssplit payments, and even missionaries and other full-time workers.

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

How Do We Maximise our HMRC Gift Aid Claims - Declarations

Here's a very helpful blog by the RSPCA on steps you can take to maximise your HMRC Gift Aid claims.

How Can We Maximise HMRC Gift Aid - Claim Everything

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.

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Claiming HMRC Gift Aid Encourages More Donations

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.

  • In a CAF survey in July 2020, four in 10 of those who already donate money to charity, said Government incentives such as Gift Aid 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.

Claim 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.

HMRC Gift Aid Rules - Donation Limits

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.

HMRC Gift Aid Rules - Declarations & Online 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.

HMRC Login and How To Claim Gift Aid Online

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 Rules On 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 donations you'll need to keep the enduring Gift Aid declarations, no matter how old it is.

How Far Back Can You Claim Gift Aid?  Retrospective Claim Deadlines

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 retrospective 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.

Who 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.

Guidance on 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.

HMRC Gift Aid Rules for Charities

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:

  • What is Gift Aid?
  • What are the Gift Aid eligibility rules?
  • Six Gift Aid rules for charities to know
  • How do charities claim Gift Aid?
  • Making the most of Gift Aid software for charities

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

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

HMRC Gift Aid Claim Rules - FAQs

  • Who can claim Gift Aid?   Charities and CASCs can claim Gift Aid on donations from donors who have paid the same amount or more in Income Tax or Capital Gains Tax in that tax year and made a Gift Aid declaration that gives you permission to claim it.
  • Can a community interest company (CIC) claim Gift Aid?   A CIC is not a charity and therefore cannot claim gift aid, unless it is a CASC.
  • Why is Gift Aid 25%?  Gift Aid allows UK charities to claim back the basic rate tax paid on donations by a donor. This means charities can claim back from HMRC 25p for every £1 donated, boosting the value of the donation by a quarter.
  • How far back can you claim Gift Aid?  You must claim Gift Aid 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.
  • What must a Gift Aid declaration contain to meet HMRC regulations?  A Gift Aid declaration must state the donor's full name and home address, name the charity, identify the gift or gifts to which the declaration relates and confirm that the identified gift or gifts are to be treated as Gift Aid donations.
  • How long must Gift Aid declarations be retained for?  All CASCs and charitable trusts and most charities must keep declaration records for 6 years from the end of the accounting period they relate
  • Is there a limit on gift aid donations?   Donations qualify as long as they're not more than 4 times what you have paid in tax in that tax year. The tax could have been paid on your income or capital gains. You must tell the charities you support if you stop paying enough tax.
  • What is the Gift Aid small donations scheme?  The Gift Aid small donations scheme (GASDS) does not require a Gift Aid declaration and allows you to claim on cash and contactless card donations up to £30.
  • What is the Gift Aid small donations scheme (GSADS) limit?  Your GASDS claim cannot be more than 10 times your Gift Aid claim.

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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.

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