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How Gift Aid works

When an individual, sole trader or partnership gives money to your charity or CASC through Gift Aid, you can take their donation – which is money they’ve already paid tax on – and reclaim basic rate tax from HM Revenue & Customs (HMRC) on its ‘gross’ equivalent – the amount before basic rate tax was deducted.

If a donor is a higher rate tax payer, they too can benefit from the tax relief as they can claim back the difference between the higher rates of tax at 40 or 50 per cent and the basic rate of tax at 20 per cent on the total value of their gross donation.

• Find out more about Gift Aid for charities on the HMRC website Opens new window

• Read guidance for small charities on tax effective giving Opens new window

• Gift Aid guidance for donors

Making a Gift Aid repayment claim

Once your charity or CASC is recognised by HMRC, you can reclaim the basic rate of tax on Gift Aid donations - this is 20 per cent from 6 April 2008. You can work out the amount of tax you can reclaim by dividing the amount donated by four. This means that for every £1 donated, you can claim an extra 25 pence.

In addition, HMRC will automatically pay your charity or CASC a further three pence for every pound donated on or before 5 April 2011. This ‘transitional relief’ – to adjust to the fall in basic rate tax (from 22 per cent to 20 per cent) – is available from 6 April 2023 until 5 April 2011.

This means for every £1 donated, your charity or CASC can receive 28 pence, so the total value of the donation is £1.28.

You can make your claim by filling in the R68(i) Gift Aid claim form.

• How to reclaim tax on Gift Aid and other income Opens new window

Gift Aid rules in specific situations

There are special rules for claiming Gift Aid in certain situations other than for simple cash gifts. You can find out more about Gift Aid involving charity auctions, membership subscriptions, admissions to view charity property, sales of goods on behalf of supporters, and other specific situations.

• Gift Aid rules in specific situations Opens new window

Keeping records

Your charity or CASC must keep an auditable record of:

• all Gift Aid declarations, together with confirmation that you have advised the donor that they must pay at least as much UK tax (for the tax year that they donate) as the amount your charity or CASC will reclaim on the donation
• any cancellations of Gift Aid declarations
• any benefits you provide to donors
  

• Gift Aid record keeping and audit requirements Opens new window

Keep up to date with charities news and events

Sign up for the new RSS newsfeed facility from HMRC Charities. It’ll keep you up to date on current issues affecting charities and CASCs.

• Sign up for the RSS feed from HMRC Charities Opens new window

Training opportunities for smaller charities

The Institute of Fundraising runs a Small Charities Training Programme. Their inexpensive workshops can provide your charity with tips and ideas on how to boost your fundraising by making it more tax-effective.

• More guidance on training opportunities for small charities and tax effective giving from the Institute of Fundraising Opens new window

Gift Aid for community fundraisers

If you’re not a charity yourself, but do have a charitable purpose, such as a local community or voluntary group – you may be able to claim Gift Aid where donations from supporters are made through a registered charity.

More useful links

• More information on how to register a charity in England or Wales Opens new window

• More information on how to register a charity in Scotland Opens new window

• Charities in Northern Ireland Opens new window

Useful contacts

• Money, tax and benefits contacts