Gift Aid

02 March 13

Gift Aid is a scheme launched by the UK Government in 1990, allowing charities to reclaim the tax that you would have paid on the amount that you’re giving.

Unsurprisingly, you therefore need to be a tax payer to sign a Gift Aid form.  But it is well worth it – Gift Aid is currently worth nearly £1bn a year to UK charities!

Here’s a quick rundown on the technical stuff, if you’re that way inclined:

  • To be eligible to make a gift to Stewardship (on give.net or elsewhere) under Gift Aid you must be a UK taxpayer paying  Income Tax and/ or Capital Gains Tax to an amount equal to or in excess of the amount of tax to be reclaimed (Gift Aid will be claimed at 25p in the pound). Therefore if you wish to donate £10 you will need to have paid £2.50 or more in tax and if you wish to donate £1,000,000 you will need to have paid £250,000 or more in tax.
  • If the above is true and the gift you wish to make is from your own personal taxable income, not from your spouse’s income and you are not making the gift on behalf of another person, a group or a company, your gift will be eligible for Gift Aid.  Congratulations!

There are a few important things you should know, that might still mean that Gift Aid doesn’t apply, such as:

  • The donation is to a family member where the charity is contributing to their costs. HM Revenue & Customs considers such assistance from the charity as a benefit and therefore support from family members is not charitable
  • The donation is made in return for goods or services
  • The donation was made on behalf of a company (The company will need to show the donation in it’s accounts and claim tax relief)
  • The gift is made by you on behalf of someone else. E.g. another family member, a group