Gift Aid for charities: how it works and how to claim

Gift Aid lets a UK charity claim an extra 25p from HMRC for every £1 a UK taxpayer gives, at no extra cost to the donor.

How Gift Aid works

A donor makes a Gift Aid declaration, and the charity then claims the basic-rate tax on the gift from HMRC. A £100 donation is worth £125 to the charity.

Higher-rate taxpayers can claim back the difference between the tax they paid on the gift and what the charity got back, through Self Assessment or by asking HMRC to amend their tax code. On a £100 gift (£125 with Gift Aid), a 40% taxpayer can personally claim back £25.00. A 45% taxpayer can claim £31.25. This is the donor's own claim, not the charity's.

Who can give under Gift Aid

The donor must have paid at least as much Income Tax or Capital Gains Tax in the tax year (6 April to 5 April) as the charity wants to claim. Donations qualify as long as they are not more than 4 times what the donor has paid in tax in that year.

If the charity reclaims more tax than the donor has paid, HMRC may ask the donor to pay the difference.

What a valid declaration needs

HMRC's guidance says a Gift Aid declaration must:

• state the donor's name and home address
• name the charity
• identify the gift or gifts it covers, for example one donation or all donations
• confirm that those gifts are to be treated as Gift Aid donations
• not include a company name or joint names

The charity must also give, and be able to show it gave, an adequate explanation of the donor's personal tax position. A declaration can be written (including email or text message) or oral, can cover one gift or many, and can be given before, at the time of, or after the donation, within the normal time limit for claims.

What a charity needs to claim

• The charity must be recognised as a charity or CASC (community amateur sports club) for tax purposes, and have an HMRC charity reference number.
• A Gift Aid declaration for each donor whose gifts it claims on.
• A clear audit trail linking each donation to the donor's declaration.
• Records kept for 6 years after the end of the accounting period they relate to, for charities run as charitable companies. Other charity types have different time limits.
• A claim made within 4 years of the end of the financial period the donation was received in. That period is the tax year for a trust, or the accounting period for a limited company, CIO or CASC.

Charities claim through HMRC Charities Online, using eligible software or a spreadsheet of donations. Claims of over 1,000 donations must use software. HMRC pays by BACS within 4 weeks if you claim online, or 5 weeks by post using form ChR1. HMRC sets these times, not Kayana.

Small donations without a declaration

Under the Gift Aid Small Donations Scheme (GASDS), a charity can claim 25% on cash donations of £30 or less, and on contactless card donations of £30 or less collected on or after 6 April 2019, without a declaration. From 6 April 2016 the claim is capped at £2,000 in a tax year, and it cannot be more than 10 times the charity's Gift Aid claim. Eligibility rules apply, so check HMRC's guidance before relying on it.

How Kayana Aid helps

Kayana Aid captures a Gift Aid declaration as supporters give and keeps it with the donation record. Kayana prepares your Gift Aid claim. You review it and submit it to HMRC from Reports → Gift Aid.

Gift Aid only shows at checkout for charities that have switched it on, and it is available for UK charities only.

Work out what a gift is worth with the free Gift Aid calculator. Read more: guide to Gift Aid claims, Gift Aid capture service, pricing, donation platform for charities.

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