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What is Gift Aid

All Gift Aid reclaims are subject to approval by HMRC.

How Gift Aid works

Since April 6, 2000 charities accepting donations from individuals can reclaim tax on the donations pre-tax or 'gross' equivalent at the basic rate of 20 per cent.

In practice, this means that if you give £10 to charity using Gift Aid, that gift is worth £12.50 to the charity. This is because as a UK tax payer you have already paid 20 per cent tax on the money you are donating so 20% of £12.50 is £2.50 - your £10 being the difference.

Gift can be reclaimed if you are an individual making a donation from your own money. Gift Aid cannot be reclaimed on donations made on behalf of someone else or if you are donating on behalf of a company.

Who can use Gift Aid?

You can use Gift Aid if you have paid UK income tax in any tax year (6 April one year to 5 April the next) and it is at least equal to the amount the charity is reclaiming on your behalf. You can calculate the amount of tax the charity will reclaim by following the example below:

If you give £100 to a charity in a particular tax year, they will claim back 100 x 20/80 = £25. You need to have paid at least this amount of tax during the same tax year to be able to donate using Gift Aid.

Who cannot use Gift Aid?

You are not allowed to use Gift Aid if any of the following applies:

  1. You are donating on behalf of someone else or for more than one person
  2. You are donating on behalf of a company
  3. You are donating to a connected person (see below*)
  4. You do not pay tax in the UK
  5. You are also not allowed to use Gift Aid if you are receiving a product, ticket or service. For example money for raffle tickets or cake sales cannot be included.
  6. You cannot self donate and apply Gift Aid if you as the owner of the fundraising page are taking part in an event where the sponsorship is paying for any part of the event such as costs for charity treks, cycles and parachute jumps.

* People ‘connected’ to the donor include husband, wife, civil partner or linear relative, any linear relative of the donor’s wife/husband or civil partner, a company under the control of the donor, or under the control of any of the above.

Higher rate taxpayers

If you're a higher rate taxpayer, you can claim the difference between the higher rate of tax at 40 per cent and the basic rate of tax at 20 per cent on the total value to the charity of your donation (the 'gross donation'). So, using the example above, you can reclaim higher rate relief of £25 (20 per cent of your gross donation of £125). You make this claim on your Self Assessment tax return.

Non taxpayers

If you do not pay tax, you should not use Gift Aid.

How to make a donation using Gift Aid

Making a donation with Gift Aid is simple, completing the DoItForCharity online donation form acts as your personal Gift Aid Declaration which is passed to the charity along with your donation. Ticking the Gift Aid box means that you declare you are a UK tax payer and that you are making a donation on behalf of yourself.

Can my company donation use Gift Aid?

No, companies making a donation cannot use Gift Aid. Gift Aid can only be used for personal donations.

Minimum sponsorship events

If you are taking part in an event which requires a minimum sponsorship to be raise or which part of the sponsorship money will be used to cover event costs you are not allowed to use Gift Aid for donations made by ‘connected persons’ (see explanation below*). Donations made by connected persons are viewed as a benefit in kind by the Government. Gift Aid can be applied to any donation made from unconnected persons such as your friends or work colleagues.

* People ‘connected’ to the donor include husband, wife, civil partner or linear relative, any linear relative of the donor’s wife/husband or civil partner, a company under the control of the donor, or under the control of any of the above.

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