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In its simplest form Gift Aid is a way for a taxpaying donor to instruct HMRC to give a charity that he/ she has made a donation to the tax he/ she has paid. For Example – You donate £100 to charity – they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).
Every donation you make to Children with Cancer UK could be worth more at no extra cost to you by choosing to Gift Aid it.
Donations made through Gift Aid mean charities are able to claim an additional 25p for every £1 you donate, without costing you any extra.
For example (if you are a basic rate taxpayer)
• You earn £125 and pay tax currently of £25 (@20%)
• You are left with £100 which you donate to charity
• If you make a Gift Aid declaration, the charity can claim back the tax you have paid i.e. £25
• This means for every £1 you donate the charity can claim 25p from HMRC
Another example
• If you make 10 donations of £100 each in one year to 10 different charities and gift aided your donations you will need to have paid £250 in tax.
By completing a Gift Aid declaration you are giving a charity the right to reclaim the tax from HMRC on your donation.
If you are a 40% tax payer or higher – a charity can still only claim the basic rate of tax on your donation BUT you can claim the difference between the higher rate of tax and the basic rate of tax on the gross value of your donation. You can make this claim on your Self- Assessment tax return or ask HMRC to adjust you tax code.
Anyone who pays UK Income and/or Capital Gains Tax qualifies. Any personal tax you pay on your salary, pension, savings or rental income is eligible.
Gift Aid can only be claimed on personal donations – it cannot be claimed on company donations or donations made with CAF and other Charity vouchers
To Gift Aid your donation, you will need to tick a Gift Aid declaration statement. The declaration statement is asking the donor to confirm that they are a UK Income Tax/Capital Gains Tax payer and that they would like Children with Cancer UK to Gift Aid their donations – this could be for all donations in the past four years and all future donations or just for their single donation depending on the wording.
The declaration is also asking the donor to confirm that they understand that they will have needed to have paid enough income tax in the tax year the claim is being made to cover all the tax that is being claimed by charities from their gift aided donations for that tax year and that if they haven’t it is their responsibility to pay the difference. For example:
You make 10 donations to 10 different charities totalling £1,000 and have gift aided those donations. Those charities will claim a total of £250.00 of tax you have paid from the HMRC, if however you have not paid that much Income and/or Capital Gains tax HMRC as saying it is your responsibility to pay the difference to HMRC.
If you donate to more than one charity, you can authorise one or all of them to claim Gift Aid by completing a declaration form. You just have to have paid enough tax each tax year to cover the Gift Aid (Tax) claimed back on all of your donations in that Tax year.
Yes! If you have set up an online page with Virgin Money Giving, Just Giving or Everyday Hero, your sponsors will automatically be asked if they want to Gift Aid their donation.
If you are using our sponsorship forms, your sponsors just need to complete their Full Name, home address and full postcode and tick the Gift Aid column on the form.
We can’t claim Gift Aid on:
• Raffle tickets or other prize entries
• Entrance Fees to an event
• Donations made via Charities Aid Foundation or other charity agencies
• Donations where a company address has been given
• Money collected by a fundraiser i.e. the fundraiser cannot Gift Aid a donation of collected monies, (each donor needs to sign/tick a Gift Aid declaration)
• A Company Cheque – the only exception is where the cheque covers donations made on a sponsorship form in which case the fundraiser has to notify the charity in writing that the cheque covers highlighted donations on the sponsorship form.
To find out more, please contact our Supporter Care Team on 0800 222 9000, or visit the HMRC website.
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