Maximising Gift Aid for your charity
How to ensure you are not missing out on the millions of pounds going unclaimed in Gift Aid
An extra £560 million a year could transform the charity sector in the UK, but, incredibly, that amount is being left unclaimed by charities because eligible donors aren’t ticking the Gift Aid box. Due to the way the scheme is structured, Gift Aid will always need to be opt-in rather than opt-out, so the onus is on us in the charity sector to encourage our supporters to take action and #tickthebox. Here’s how to boost Gift Aid pick-up on three major sources of income:
1. Direct donations / fundraiser sponsorship
The biggest barrier to individual donors ticking the box is a lack of understanding over what Gift Aid is and whether they qualify to boost their donations. We’ve created a handy guide designed to give everyone the confidence to tick. Get your fundraisers to have a read and spread the word. If they can encourage their donors to opt in to Gift Aid then we can start shrinking that figure of £560 million left unclaimed. It’s also well worth getting behind Gift Aid Awareness Day (3rd October 2019), a nationwide campaign to spread awareness of the importance of that little box.
Hosting a fundraising event makes Gift Aid giving a little more complicated, but not impossible. If your event has a set ticket price to attend then Gift Aid cannot be claimed on that money. Making an event entirely donation-based would qualify it for Gift Aid, but if there are costs involved in hosting the event, then that opens the charity up to losses, which could cause separate tax and governance issues.
There is, however, another way. If you add a suggested donation on top of your ticket price, then this would be eligible for Gift Aid. So if you have a set ticket price of say, £20, and then a suggested voluntary donation of £10, you can claim Gift Aid on that £10, boosting it to £12.50. You just need to be clear that the donation portion is entirely voluntary and you cannot give special treatment, such as free drinks or better seats, to those that opt in.
One of the most exciting developments in recent years is the Gift Aid Small Donations Scheme (GASDS), which allows eligible charities to claim on small cash donations such as money collected in buckets on the street. Introduced in 2013, the scheme has really taken off since the rules were tweaked in 2017 – payments made under GASDS were £40 million for 2018/19, up from £6 million in its first year. All registered charities that have claimed GIft Aid in the tax year qualify and cash or contactless card donations of £30 or less are eligible providing they are made by an individual and deposited in a UK bank account.
Unlike Gift Aid, the donor declaration is not needed for GASDS – the charity does not have to know the identity of the donor. But, just like Gift Aid, eligible donations can be boosted by 25 percent. You can claim against £8,000 worth of small donations per tax year – meaning up to £2,000 of otherwise unclaimed money – and you cannot claim more than ten times in GASDS what you claimed in Gift Aid for that tax year. So, for example, if you received £100 of Gift Aid donations in a tax year, then GASDS can be claimed on up to £1,000-worth of small cash donations, boosting the total to £1,250.
For more on Gift Aid Awareness Day see https://www.cfg.org.uk/tickthebox
For HMRC’s advice on claiming Gift Aid and CASC see https://www.gov.uk/claim-gift-aid