Gift Aid is a scheme which allows charities and Community Amateur Sports Clubs (CASCs) to claim from HMRC, the basic rate of tax their donors have paid. Gift Aid increases the value of donations by 25%, so it means even more money goes to the causes you care about – and it won’t cost you extra.
You can claim back 25p every time an individual donates £1 to your charity or community amateur sports club.
You must be recognised as a charity or community amateur sports club for tax purposes, with HMRC.
What the donor needs to do
The donor must:
- have paid at least as much in Income Tax or Capital Gains Tax in that tax year as you want to claim in Gift Aid
- make a Gift Aid declaration that gives you permission to claim it
If the donor has not made a declaration you may still be able to claim on cash donations of £30 or less (small donations scheme), for example from a collection.
What you can claim Gift Aid on
Donations from an individual, where they have paid at least as much in Income Tax or Capital Gains Tax and made a gift aid declaration (or eligible for the small donations).
There are special rules for:
- funds from sponsored challenges for example overseas treks or marathons
- charity membership fees
- church collections
- selling goods on behalf of individuals,for example through a charity shop
- charity events or to view charity property
- charity auctions
- volunteer expenses donated back to your charity or community amateur sports club
- funds raised through charities involved in running schools
for more detail about the above, please click here – https://nicholsonandco.co.uk/gift-aid/what-you-can-claim-gift-aid-on-more-detail-on-special-rules/
What you cannot claim it on
You cannot claim on donations:
- from limited companies
- made through Payroll Giving
- that are a payment for goods or services or made because your charity or community amateur sports club bought goods and services
- that started as loans, but no longer need to be repaid
- where the donor gets a ‘benefit’ over a certain limit, see the benefit rule for more information.
- of shares
- from charity cards or of vouchers, for example Charities Aid Foundation (CAF) vouchers
- of membership fees to community amateur sports club’s
- you got before you were a recognised charity or community amateur sports club
How to claim
You can claim Gift Aid using Charities Online with:
- eligible software, like a database
- a spreadsheet, click here to download
For claims of over 1,000 donations you must use software.
To apply by post use form ChR1, which you can get from the charities helpline.
When you must claim
Your deadline to claim Gift Aid depends on how your charity is set up.
You need to claim for a donation within 4 years of the end of the financial period you received it in. This is:
- the tax year (6 April to 5 April) if you’re a trust
- your accounting period if your charity is a community amateur sports club (CASC), a Charity Incorporated Organisation (CIO) or a limited company
You must claim 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.
Keeping records
You need to keep records of these donations for a further two years.
When you’ll get paid
You’ll get a Gift Aid payment by BACS within:
- 4 weeks if you claimed online
- 5 weeks if you claimed by post using form ChR1
Contact the charities helpline if your repayment is wrong or if you submitted an incorrect claim.