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The 2008 Budget has
received Royal Assent, which means that
transitional relief will be paid
automatically on Gift Aid claims from 1st
August 2008. Gift Aid claims made
between 6th April 2008 and 1st August 2008
will receive backdated transitional relief
payments in due course. For more information
see our briefing
or contact
the tax-effective giving team.
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Gift Aid is the easiest way to increase donations to your charity by nearly a third at no cost to your donor. All you have to do is ask donors for permission to reclaim the tax they have paid to HM Revenue & Customs.
Each year, charities raise over half a billion in Gift Aid tax relief. We are here to help you make your reclaim.
• What is it?
• How does it work?
• Declarations
• Promoting Gift Aid to Your Charity and Donors
• Did You Know?
Institute of Fundraising briefings on Gift Aid
• Promoting Gift Aid - more FREE downloads
• Codes of Fundraising Practice for Gift Aid
• Need more help?
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Gift Aid is a simple scheme that enables charities to claim an additional
25p from every £1 donated by UK taxpayers.
In addition to this, the Government will
provide Transitional Relief of 2%. So while
charities will claim 25p from each £1
donated, they will actually receive 28p! until
the 2011 tax year. Charities of all sizes are encouraged to make the most of Gift Aid to increase income to their organisation and to apply the Gift Aid logo to their fundraising materials.
* Changes to Gift Aid following the 2008
Budget*
In addition to Transitional Relief, there
have also been some administrative changes
to Gift Aid and the audit process.
Click on the appropriate link for HMRC
guidance on administrative
changes and transitional
relief.
Click on the appropriate link for
Institute of Fundraising guidance on
administrative changes and
transitional relief.
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Gift Aid can apply to one-off donations, those over a specific period and can even be backdated for up to 6 years. It can apply to sponsorships and certain membership fees.
On top of this, higher rate taxpayers are eligible to reclaim
25p from the taxman for every £1 donated to charity
by including details of their donations on their Self Assessment form. This rebate can be donated directly to a charity of their choice on the same form and if the donor chooses to do so it can be increased further through Gift Aid.
To calculate the value of your donations with Gift Aid, use our Gift Aid Calculator on the left of this page.
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A Gift Aid declaration can be made either in writing or orally and may cover donations made since 5 April
2003 and all future donations. The donor needs to understand that they are giving you authority to reclaim tax from HM Revenue & Customs on the gift.
Click here for a model declaration and here for a model Gift Aid sponsorship form.
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Once you have registered with HMRC and started using Gift Aid, it's important to maximise its' potential. This means communicating it to your donors and building awareness within your organisation.
Our downloads page has a number of items which will help you get the Gift Aid message out. including:
Case Study
Find out how one smaller charity has succeeded in increasing their income through Gift Aid.
Gift Aid Promotional Tips
10 tops tips to succeeding with Gift Aid
Template Article
Tailor this article to your charity and include it in your next newsletter to donors.
Template Press Release
Promote your Gift Aid success by tailor this release to your charity and sending it out to your local press.
Template Letter A
Thank you letter to donors, asking for Gift Aid
Template Letter B
Thank you letter to donors who have Gift Aided their donation
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The Institute is creating a series of briefings that are designed to answer questions around various tax effective giving schemes and how they are applied in practice. Click on a link below to learn how you can maximise the Gift Aid potential of specific fundraising techniques.
• Gift Aid,
Income Tax rate changes and Transitional
Relief
• Time Limits for Gift Aid
• New guidance for Gift Aid on Visitor Donations
• Charity Challenge Events and Gift Aid
• Gift Aid and Charity Auctions
• Gift Aid:Frequently Asked Questions
• Gift Aid and memberships
• Benefit Rule and Connected Persons
• Registering for Gift Aid
• Income Tax Rates and Gift Aid
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The Budget on the 12th of March 2008 made a
number of significant changes that affect
tax-effective giving. Among some of the more
important changes was the lowering of the
basic rate of tax from 22% to 20% and the
knock on effect on the amount claimed on
Gift Aid. However, Transitional Relief was
introduced for three years to allow
charities to receive the same amount.
For more information, see our Did You Know sheet on the topic.
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Charities must be aware that there are time limits for making Gift Aid tax claims. Gift Aid claims must be completed within the time limits outlined below:
A charity that is a registered company must consider the '6 year rule' on all Gift Aid tax claims. The charity must make a Gift Aid tax claim within six years from the end of the accounting period to which the claim relates.
A charity which is classified as a trust for tax purposes must make any claim within 5 years of 31 January in the year following the end of the tax year to which the claim relates.
For more information, see our Did You Know sheet on the topic.
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New HMRC guidelines for Gift Aid on charity visitor donations come into force in April 2006. The new rules will give more charities the opportunity to claim Gift Aid on visitor donations.
For more information, see our Did You Know sheet on the topic. Charity Challenge Events and Gift Aid Many charities raise funds via sponsored events and challenges, using Gift Aid to maximise the money raised. However, there are specific circumstances under which certain donations may become ineligible for Gift Aid, and charities should be aware of these. Click here for a model Gift Aid sponsorship form.
For more information, see our Did You Know sheet on the topic.
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Many charities raise funds via sponsored events and challenges, using Gift Aid to maximise the money raised. However, there are specific circumstances under which certain donations may become ineligible for Gift Aid, and charities should be aware of these.
Click here for a model Gift Aid sponsorship form.
For more information, see our Did You Know sheet on the topic.
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Auctions are a great way for charities to raise money, and with the proper use of Gift Aid, the funds can be maximised to their full potential. Under certain circumstances, it is possible to treat all, or part, of the purchase price as a donation.
For more information, see our Did You Know sheet on the topic.
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How do I store Gift Aid records, What is the Benefit Rule? what is a connected person? How do I 'buy the benefit'? These and other questions are answered in this helpful general briefing.
For more information, see our Did you Know sheet on the topic.
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The way to make your membership subscriptions tax-effective has changed. Gift Aid is available to those membership schemes that meet certain criteria. Check to see whether or not your members can make their subscriptions go even further.
For more information, see our Did You Know sheet on the topic.
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Sometimes donations can be accepted, but not Gift Aided. At other times donations from one party are eligible for Gift Aid, but not from another party. This is often due to the rules on benefits and connected persons.
For more information, see our Did You Know sheet on the topic.
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In order to take advantage of Gift Aid, you must first be recognised by Her Majesty's Customs and Revenue as a charitable enterprise for tax purposes. This is not the same as being registered with the Charity Commission.
For more information, see our Did You Know sheet on the topic.
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For further information, please consult the following HMRC documents or call the HMRC Charities helpline on 0845 302 0203.
• Introduction to Gift Aid
• Claiming Tax Back - Frequently asked questions
• Section F: Particular situations
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