Gift Aid is a scheme that allows charities to claim back the basic rate of tax on donations they receive from British taxpayers. That means you can get an extra 25% on all donations – without extra cost to the donor.
When people give money to charities, the Gift Aid scheme allows the charities to reclaim the basic rate of tax on this donation, if the donor is a UK tax payer. When a taxpayer donates a portion of their earnings to charity, Gift Aid allows that charity to reclaim the income tax that was paid in the first place. That works out at 25p for every £1 donated.
You can find all the information you need to get started with Gift Aid on the HMRC website
Step one: register with HM Revenue and Customs
To claim back the tax on Gift Aided donations, your organisation first needs to register with HM Revenue and Customs. To do this, you need to download and fill in a form (Cha1). You can download the form, and find out more about how to register on the HMRC website (http://bit.ly/iHV78X). You don’t need to be registered with the Charity Commission to register with HMRC, unless your income is over £5,000.
Step two: get donors to make a written declaration
If you want to claim Gift Aid, you need to get your donors to make a simple written declaration. You can design your own form – but it’s easier to download a template from the Tax Effective Giving website (www.tax-effective-giving.org.uk).
Whatever format you use, the declaration form needs to include the following information: the donor’s full name and address; the name of your charity; the amount donated; confirmation that the donor wants Gift Aid to be claimed and confirmation that the donor pays UK tax.
You need to keep your Gift Aid records for six years after the end of the year when you make your claim – and HMRC can ask to see these records at any time during this period.
Step three: fill in a HMRC form to claim back the tax
To claim back the tax from HMRC, you need to fill in a form (R68(i)), available from HMRC. On this form, you list all the details of the donations you want to claim Gift Aid on, together with details of the donor, taken from the declaration form they signed.
For more information about Gift Aid, visit the HMRC website
Voluntary Action Westminster is a registered charity (no. 1068824) and is registered as a company in England and Wales with company number 03518124. Copyright Voluntary Action Westminster 2009