Gift Aid is a UK government tax relief designed to benefit donors, registered charity organisations and Community Amateur Sports Clubs (CASCs). If you’re a UK taxpayer, the scheme increases the value of your charitable donation by 25%, meaning every £1 you donate, 25p gets added at no extra cost to you!
The UK public donated generously in 2016, contributing a massive 9.7 billion pounds to charity, Gift Aid alone generated £1.2 billion of this!
If you want to start taking advantage of this valuable tax benefit but are unsure where to start, we have put together a list of answers to some commonly asked questions below.
Am I paying enough tax to qualify?
First of all, for your donations to qualify, you must have:
- Paid UK Income or Capital Gains Tax that financial year
- Paid the equivalent amount in tax of the Gift Aid the charity will reclaim on your donation.
- Notified your supported charity if you stop paying enough tax, for example; you stop working or your tax rate changes.
What do I need to do as a donor?
As a donor, you will have to make a Gift Aid declaration (GAD) for your chosen charity to claim. You can do this by filling out a declaration form at the point of a donation. Remember to ask for one of these as you donate!
Can I claim Gift Aid on historical donations?
Yes! One of the great things about the scheme is the ability to claim on any eligible donations up to 4 years old. But remember to let any charities that you donated to know of the years you didn’t pay enough tax.
What happens if I’m a higher rate taxpayer?
Furthermore, if you are a higher rate taxpayer, you can claim back additional benefits on the donations you make. Just include the amount you’ve donated when you complete your self-assessment form.
That’s pretty much it, and we hope this helped! If you need to know more you can find additional information about Gift Aid by visiting the UK government website
What is Swiftaid?
Swiftaid is a service that enables automatic Gift Aid on card donations and tax refunds for Higher Rate Taxpayers. Over the past decade, there has been a shift towards card payments over cash, which has had detrimental effects on the amount charities have been able to collect with donation buckets. The industry is responding by adopting contactless terminals, but currently, there is no seamless way of attaching Gift Aid to these donations. Around £575 million each year goes unclaimed. Swiftaid is here to fix this!