Gift Aid: How the Government can make your gift go further
Country/Region: United Kingdom
What is Gift Aid?
Gift Aid is a scheme which allows Barnabas Fund, as a charity, to claim a tax repayment from the government in respect of a gift made by a UK taxpayer. This increases the value of the gift by 25 per cent at no additional cost to the donor. So if £100 is donated by a UK taxpayer, the government will top this up to £125. This is based on tax already paid by the donor at 20 per cent.
Do my gifts qualify for Gift Aid?
For gifts to qualify for Gift Aid, the donor must pay a total amount of income tax and/or capital gains tax at least equal to the amount of tax to be reclaimed by charities on donations in any tax year. In simple terms, for every £25 paid in tax £100 may be donated to charity under the Gift Aid scheme.
Pensioners may Gift Aid their charitable donations provided sufficient tax is paid on their pension or other income/gains.
If your tax affairs are complex, we suggest you review your position carefully before making significant donations under Gift Aid. For example, some tax allowances and reliefs affect the amount of tax that can be reclaimed by charities under the Gift Aid provisions.
An individual will be personally liable to HMRC if the total amount of tax reclaimed on their gifts in any tax year exceeds the tax they have paid.
How can I give through Gift Aid?
In order for us to reclaim tax under Gift Aid, you will need to complete a simple Gift Aid declaration. You can do this by making a donation online through our website or alternatively if making a donation by post or phone please print out and send this form to:
FREEPOST - RRRC-GUGR-ETHZ
9 Priory Row, Coventry,
If you would prefer for us to send you a form by post please contact us on 024 7623 1923 or by emailing email@example.com. One declaration can cover both current and future gifts made to Barnabas Fund. You may also make a backdated claim for gifts made in the last four tax years plus the current tax year.
Please inform us if you change your name or address or stop paying tax.
Barnabas Fund can reclaim tax through Gift Aid on donations from a joint bank account where one party is a taxpayer and the other is not, provided the taxpayer completes a Gift Aid declaration and it is their name on the gift form. If the gift is made by cheque, it can be signed by either party. For joint credit card donations the taxpayer's card should be used.
If you are taking an offering or collection for Barnabas Fund, the easiest way of ensuring that individual gifts are eligible for Gift Aid is by using Gift Aid envelopes. These enable the amount, the identity of the donor and their Gift Aid declaration to be identified on a single form. Gift Aid envelopes can be ordered by clicking here or by contacting Barnabas Fund on 024 7623 1923.
Higher-rate UK taxpayers:
A charity can reclaim tax at the basic rate of 20 per cent on gifts made under Gift Aid. However tax relief is available to the donor at their highest tax rate for Gift Aided donations. So if you pay tax at 40 or 50 per cent you can reclaim the additional 20 or 30 per cent from HMRC on the gross value of your charitable donations. You may then keep this rebate or donate it to charity.
For example, if £100 is donated to Barnabas Fund under Gift Aid by a higher-rate taxpayer the gross value of this gift to us is £125. The donor may then, dependent on their tax rate, personally reclaim a further 20 per cent (£25) or 30 per cent (£37.50) in respect of this donation on their Self Assessment tax return.
Gifts of Investments
The Government offers further tax incentives to taxpayers wishing to make donations by gifting land, property or shares to charity:
- No capital gains tax is payable on any gain that would otherwise arise on the sale of these assets.
- The donor's income is reduced by the value of these assets and they will therefore be able to claim a personal tax refund in respect of the gift.
For further information visit: http://www.hmrc.gov.uk/individuals/giving/gift-aid.htm
If you have any questions please do not hesitate to contact us: firstname.lastname@example.org