Gift Aid explained for small UK charities

Gift Aid is a UK government scheme that lets charities and community amateur sports clubs (CASCs) reclaim the basic-rate tax a donor has already paid on their gift. For every £1 an eligible UK taxpayer gives, your charity can claim an extra 25p from HMRC. The donor pays nothing more. They just need to make a Gift Aid declaration, and you need to keep it. This guide covers how it works, who qualifies, and how to claim.

How Gift Aid works in one paragraph

When a UK taxpayer earns money, they pay Income Tax on it. When they then give some of that money to charity, HMRC lets the charity reclaim the basic-rate tax on the gift. Basic rate is 20%, and 20% of the gross amount works out at 25% of the net donation. So a £10 gift becomes £12.50. HMRC explains the scheme on GOV.UK: Claiming Gift Aid as a charity or CASC.

Who can claim Gift Aid?

Your organisation must be recognised by HMRC as a charity for tax purposes. In practice that means:

You are a registered charity (or a CASC), or an organisation HMRC accepts as charitable.
You have registered with HMRC for charity tax reliefs and have an HMRC charity reference number.
You have an authorised official who can submit claims.

If you have not done this yet, it is the first job. Registration with the Charity Commission (England and Wales), OSCR (Scotland), or the Charity Commission for Northern Ireland is separate from HMRC recognition. You need both to claim.

Which donations qualify?

A gift qualifies if:

It is a gift of money from an individual (not a company).
The donor is a UK taxpayer who has paid, or will pay, enough Income Tax or Capital Gains Tax in that tax year to cover the Gift Aid on all their donations.
The donor has made a valid Gift Aid declaration.
The donor does not receive a benefit worth more than HMRC’s limits in return.

Things that usually do not qualify include raffle or lottery tickets, payments for goods or event tickets, and money collected from several people under one name. HMRC’s guidance lists the exceptions in detail.

What a Gift Aid declaration must contain

HMRC sets out the minimum on GOV.UK: Gift Aid declarations. A declaration needs:

The donor’s full name.
Their home address, including at least the house name or number and postcode.
The name of your charity.
A description of the gift or gifts it covers (one gift, or all gifts in a period).
A statement that the gifts are to be treated as Gift Aid donations.
A note explaining that the donor must pay enough tax to cover the Gift Aid claimed, and that they are responsible for any shortfall.

It can be written, online, or verbal (with a written confirmation sent afterwards). Most online donation pages, including Kayana Aid’s, ask for these details with a tick box at checkout. We go deeper on this in Gift Aid declarations: what donor details you need.

How a small charity claims

Collect the declaration with the gift. The simplest moment is at the point of donation.
Keep the records. HMRC expects you to keep declarations and donation records for six years.
Build the schedule. HMRC provides a spreadsheet template listing each donor, address, date, and amount.
Submit through Charities Online. Your authorised official logs in and uploads the schedule.
Receive the payment. HMRC pays the Gift Aid into your charity’s bank account, separately from the original donations.

You can claim as often as you like, and you can go back up to four years, so missed gifts are not lost.

How Kayana Aid helps with Gift Aid

Kayana Aid captures the declaration at checkout, including the donor’s full name, home address, and taxpayer confirmation, and stores it with each donation. When you are ready to claim, go to Reports → Gift Aid, choose a date range, and download a CSV that follows HMRC’s donor schedule columns. You review it, fill any gaps, copy the rows into HMRC’s current schedule, and submit it through Charities Online yourself.

To be clear: Kayana Aid prepares the claim data. Your charity reviews it and submits it to HMRC. We do not file on your behalf, and your authorised official stays in control. Read more on our Gift Aid page and in the help centre article on HMRC submissions.

The Gift Aid Small Donations Scheme (GASDS)

If you collect cash or contactless gifts of £30 or less, you may also be able to claim a top-up under GASDS without a declaration for each gift. HMRC caps the donations you can claim on each tax year, and you usually need a Gift Aid claim history first. The rules and current limits are on GOV.UK. It is a useful add-on for bucket collections and shop tins, and it is separate from your main claim.

Common mistakes to avoid

Missing address details. A declaration without a house number and postcode is not valid.
Claiming on non-gifts. Ticket sales and purchases do not qualify.
Claiming on company donations. Companies get their relief differently.
Losing the paperwork. If HMRC asks and you cannot show the declaration, the claim may be reversed.
Not telling donors about higher-rate relief. Higher-rate taxpayers can claim the difference themselves, which is a good reason for them to tick the box.

FAQ

How much is Gift Aid worth?

25p for every £1 donated by an eligible UK taxpayer. A £40 gift becomes £50.

Does the donor pay anything extra?

No. The charity reclaims tax the donor has already paid. Higher-rate taxpayers can even claim some back on their own return.

Does Kayana Aid submit Gift Aid to HMRC for me?

No. Kayana Aid prepares the claim data in HMRC’s schedule format. Your charity reviews and submits it through HMRC Charities Online.

Can I claim Gift Aid on old donations?

Yes, if you hold a valid declaration. You can usually go back up to four years.

Next step

If you already take donations on Kayana Aid, open Reports → Gift Aid and see how much is waiting to be claimed. If you do not yet, read how it works on our Gift Aid page.

Gift Aid explained: how small UK charities claim an extra 25p in the pound