21st June 2020

The benefit rule

When someone makes a donation, you might want to give the donor something in return (an item or service) to say thank you. This is known as a ‘benefit’. Literature that tells donors what your charity does, such as a newsletter or a simple plaque to thank a donor, does not count as benefits.

The value of a benefit is always the value to the recipient, not the cost to your charity or community amateur sports club. For most benefits, the value is the retail value of the item or service.

If you cannot find out the retail value of an item or service, you must work out how much someone would pay. For example, you could look at the value of similar items or services. Where a benefit is attendance at an event that is not open to the public, the value of the benefit is the cost of the event divided by the number of guests.

You can claim Gift Aid on the donation if the value of the benefit does not exceed certain limits, for example:

Donation Maximum value of benefit
up to £100 25% of the donation
£101 + 25% of £100
plus 5% of £101 up to the total benefit value of £2,500

These rules still apply when a family member or a company run by the donor receives the benefit.

The benefit rules apply to different types of donation, such as charity auctions and charity events. They may affect the amount you can claim.