Gift Aid: A Guide

Charitable donations come from a great place, one of kindness and generosity from people who have something to share. To protect the intent of these donations the government has implemented a tax benefit that means all of the money given to charity stays with the charity.

As a charitable organisation you want to make sure that you maximise the amount of money which goes to the charity itself, but how do you achieve this?

What is Gift Aid?

money in the glass with filter effect retro vintage style

Gift aid, simply, is a further 25p for every £1 that is donated. It is an income tax relief that was designed in order to benefit charities and community sports clubs (CASC). For UK citizens who pay tax, it means that their charity donations are increased, as a result of the charity being able to reclaim the rate of tax on the gift at no extra cost to the donator.

How does it Work?

Pound Coins

The process of gift aid is actually very simple and easy to accomplish. The person who donates simply has to fill out a Gift Aid Declaration Form, which is a statement from the person to your charity affirming that they want to donate through Gift Aid and receive the tax back from the donation. The donation will not be accepted for Gift Aid if the amount paid is four times that which the donator has paid in tax that year. It is important that you stress donators being open with the charity about not paying enough tax in a calendar year, as this will also have an impact on your charity receiving the Gift Aid as a result of their donation.

Claiming Gift Aid

Close up of female accountant or banker making calculations

Charities are not required to pay tax on most of the types of income that they receive, which is why you can claim the tax back through Gift Aid in this way.

You can claim Gift Aid on donations from individuals, but there are also a number of things which you can’t claim it on:

  • Gifts from limited companies
  • Shares
  • Membership fees to CASC
  • You received it before you were a recognised charity
  • Payment for goods or services
  • From charity cards or vouchers

 

One way in which you can capture 100% of your Gift Aid is through our CHARiot solution – a straightforward system that is easy to use with the Full Scan System. We don’t take commission from your Gift Aid, so you will always receive the full amount.

Have any further enquiries about how Gift Aid works? Don’t hesitate to contact us; you can speak to our friendly team on 01204 706 000, or to keep up to date with all of our latest news and updates follow us on Facebook and Twitter.

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