Gift Aid is an income tax relief designed to benefit charities and Community Amateur Sports Clubs (CASCs). If you’re a UK taxpayer, Gift Aid increases the value of your charity donations by 25%, because the charity can reclaim the basic rate of tax on your gift – at no extra cost to you.
Frequently asked questions
You can’t claim Gift Aid on the following donations:
- A donation in return for tickets (raffles, events and auctions) or goods and services. This is because they are not ‘freewill’ gifts – you are getting something in return for your donation.
- Donations on behalf of someone else or a group of people.
E.g. If a friend gives you £10 which you donate to your Fundraising Page using your own card and details. Even if your friend is a UK taxpayer, the donation is not eligible because HMRC needs to know the details of the person actually contributing the funds.
- Making a donation on behalf of a company. You can only make Gift Aid declarations on your own taxpayer status when spending your own money.
- Making a donation to a family member who’s taking part in an event and their charity is contributing to the cost.
E.g. If you’re donating to a close family member who is doing an overseas trek and the charity is paying for the cost of their trip.
You are a UK income tax payer if any of the following are true:
- Tax is taken from your wages or pension before you receive them
- You fill in a self-assessment tax return for HMRC
- You have any taxable savings (e.g. in a building society), a pension plan, or investment income
You may also have paid capital gains tax on the sale of property or shares, for example. Inheritance Tax does not count as income or capital gains tax.
To work out if you’ve paid enough tax to cover your donations, divide the donation value by four.
For example, if you give £100 in a particular tax year you will need to have paid £25 tax over that period. (£100/4 = £25). (Note that this calculation is based on the basic rate tax of 20 per cent).
If you don’t think you’ve paid enough tax this year, you may be able to carry back your donation to the previous tax year.
If you pay higher rate tax, you can claim the difference between the higher rate of tax (40% and/or 50%) and the basic rate of tax (20%) on the total ‘gross’ value of your donation.
If you pay Income Tax at the higher or additional rate and want to receive the additional tax relief due, you must include all Gift Aid donations from your Swiftaid account on your Self-Assessment tax return, or ask HM Revenue and Customs to adjust your tax code.
We don’t charge charities a fee for processing Gift Aid, the full 25% goes to the charity. In the future, we aim to introduce optional subscription services with value-add features for charities to help them discover more about the donations they receive.