Gift Aid: what’s stopping you ticking that box
#tickthebox and make a world of difference
£560 million could do an awful lot of good in the world. But, incredibly, that amount of potential is being left unclaimed by charities every year because people aren’t always ticking the Gift Aid box.
One small tick in the box boosts your donation by 25 percent. £10 suddenly becomes £12.50, £100 to £125. So what’s stopping you? Often it’s the fear of not knowing what Gift Aid is and if you are eligible. Here’s our six-point checklist to see if you can #tickthebox.
Are you a UK taxpayer?
For Gift Aid to work you need to have paid at least as much in income or capital gains tax in that tax year as the charity wants to claim in Gift Aid. So to boost a £1 donation you’ll need to have paid 25p in tax in the same tax year (which runs from 6th April to 5th April) that the donation is made. It doesn’t matter if you’re unemployed or retired at the time of giving – as long as you’ve paid that amount or more in that tax year then you’re golden.
Can it be any tax?
Just about. The qualifying taxes are:
- Income tax
- Capital gains tax
- Personal or occupational pension
- Stocks or shares
- Bank or building society savings accounts
- Rental income
- Overseas or UK investment dividends
Is it your money?
You can only tick the box when the money you are donating is yours. So you can’t, for example, have a bake sale, sell slices of cake for cash and then tick the box when you donate that money to charity. Gift Aid can, however, be claimed for money raised by people donating to come to an event, as long as it is a voluntary donation rather than a fixed entry price. So that bake sale can become an all-you-can-eat cakeathon with a suggested donation of £5, which can be made via your Virgin Money Giving page. The event has to be free for those that don’t want to donate, but there must be more people willing to cough up for their battenberg than sponge cake spongers in the world. Any costs cannot be taken from Gift Aid-donated money, so you’ll need to pay for your own eggs and flour. The same goes for sponsored events, so if you’re running a marathon send givers to your VMG page and encourage them to tick.
What if I need to cover costs?
If you are organising a larger event, such as a charity ball, and need a set ticket price to ensure costs are covered rather than a voluntary donation then Gift Aid cannot be claimed on the ticket price. You can, however, do a bit of both. Have a set ticket price of say, £20, and then a suggested voluntary donation of £10 which you can claim Gift Aid on – boosting it to £12.50. You just need to be clear that the donation cost is entirely voluntary and you can’t give special treatment, like free drinks or better seats, to those that donate.
Is there something in it for me?
The major benefit is knowing that you are boosting your contribution and doing more good in the world, but there could be tax benefits for you as well. Higher rate taxpayers are entitled to claim the difference between the top rate of tax they pay, and the basic rate on the total value of the donation. Individuals can claim the additional tax relief through their self-assessment tax return or by asking HMRC to amend their tax code. You can read more about that here.
Is it worth it?
Yes. Since Virgin Money Giving launched, we have collected and paid over £114 million to charities in Gift Aid. We never charge charities or fundraisers for doing so and are incredibly proud of the difference. We can’t tick that box for you – but once you do we’ll take care of the rest.