Clever Giving

Gift Aid Basics

What is Gift Aid?

Gift Aid is an easy way for individuals who pay income tax/capital gains tax to increase the value of a donation to charity. It costs them nothing to do this. They are, in effect, allowing the charity to claim 25% more than they actually give. For example, if someone donates £10, we can receive £12.50 by claiming the extra from the government. This is possible because the government treats the donation as if the giver had already deducted basic rate income tax from the donation.

What is in it for the giver?
For a basic rate taxpayer, the satisfaction that some of their tax is helping their charity.
For a higher rate tax payer
, the above plus the fact that they too can benefit from tax relief. They can claim back the difference between the higher rate of tax and the basic rate. This would be done through a self assessment tax return. If you do not receive one of these, you can contact your tax office for advice.

Are there any limits on how much the charity can claim?
Yes. The limit the charity can claim is the amount of tax you pay at basic rate in a tax year (6th April to 5th April). You must pay sufficient UK tax on the total amount of those donations to cover what we claim. If you do not pay any income tax, you must not ask us to claim Gift Aid on your donations. Otherwise you may be required to pay any shortfall to Her Majesty’s Revenue and Customs. Do not let this put you off!

How do I know how much I can give using the Gift Aid scheme?
It is easy to work out as long as you know how much tax you pay. You should be able to find this on your pay slip or any other document relating to income. You simply multiply your tax paid by 4 to find the maximum level of Gift Aided giving. E.g., if you pay £100 tax per month you are allowed to donate £400. (Another way of making sure you pay enough tax is to divide your giving by 4 and making sure that you pay at least that amount of tax.)

Do I have to fill in any forms?
Yes. You have to fill in one form called a Gift Aid Declaration (ask you local minister or call 0115 8378083). We provide you with this and you return it to us. This simply informs us that you pay income tax in the UK and you want us to claim back the tax on your donations. You must, of course, also tell us if you cease to pay tax. Otherwise we will keep on claiming. You can do this verbally but we prefer to have it in writing. We are required to keep this form along with a record of all your donations.

Which donations will you claim on?
Once you complete a Gift Aid Declaration form we will claim on:

  • cash donations which you put in a Gift Aid Envelope and indicate is from you by completing the back of the envelope
  • cheque donations
  • PayPal donations
  • standing orders and other donations into the bank

If you only wish us to claim the Gift Aid on cash donations which YOU specify, you can just complete a Gift Aid Envelope each time and tick the relevant box.

What is the Gift Aid Small Donations Scheme?
This was introduced by the Government in order that charities can claim on a limited amount of loose cash donations irrespective of whether the giver is a tax payer or not. Basically, if you put cash in the offering, we can claim an extra 25% - no matter who you are. The limit on this is £20 per person, per offering (to rise to £30 from 6th April 2019). If you are a tax payer, it is best to use the gift aid envelopes. If you are not, then your donation is still helping more than you realise!


Isn’t Gift Aid complicated?
Actually, it is quite easy. You just need to fill in a simple form and, if applicable, a Gift Aid Envelope each time you give cash. You also need to know how much tax you pay and be able to divide or multiply by four.

Won’t everyone see how much I give?
The only people who should see this are those who count the offerings, those who deal with the accounts and HMRC.

Will I be committed to giving a specific amount on a regular basis?
No. Although many people give tithes and offerings regularly, there is no commitment to regular giving by filling out a Gift Aid Declaration. Gift Aid is based on actual individual gifts, not on a long term promise to give.

I don’t pay income tax but I pay council tax and VAT. Does this count?
No. Only income tax and capital gains tax count.

Where can I get more advice?

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