Gift Aid is a powerful way to make eligible donations go further, but it can be a tedious process. Here’s how it works, who qualifies, and how to make the claims process easier.
Join the fundraising movement! Join the fundraising movement!
Add us as a preferred source on Google
Gift Aid is one of the easiest ways for UK charities like yours to claim more from eligible donations – but it can quickly become another admin-heavy task on an already full plate.
In this guide, I’ll cover what Gift Aid is, how it works, who qualifies, and how to easily automate the process to save time for your team.
Gift Aid is an income tax relief designed to benefit charities and Community Amateur Sports Clubs (CASCs) in the UK. Gift Aid increases the value of your charity’s donations by 25%, because you can reclaim the basic rate of tax on your donations – at no extra cost to the donors.
Claim back 25p every time an eligible individual donates £1 to your charity or community amateur sports club (CASC).
This allows your nonprofit to boost eligible donations by 25%.
To be able to claim Gift Aid, the organization must be recognized as a charity or CASC. It must also be:
Plus, the donor must:
Your donors’ Gift Aid status can be saved, which enables you to reclaim extra tax every time they donate.
Once your charity is recognised by HMRC, you can start claiming Gift Aid on qualifying donations.
To claim Gift Aid manually, your organization will need to:
This manual process works, but as you can imagine, it’s rather time-consuming – and also leaves more room for admin errors. Just two reasons why charities like yours choose to use platforms like Donorbox to streamline the process.
Donorbox helps you streamline the Gift Aid submission process by allowing you to collect Gift Aid declarations right on your donation form or Donorbox™ Live checkout flow. When eligible UK donors give, they can mark their donation as a Gift Aid contribution, allowing your team to gather the information they need from the start.
See how Positive Steps easily collects this information on their Donorbox donation form:
Easily Collect Gift Aid Declarations
Plus, take things a step further with the automated HMRC Gift Aid submission add-on, available to Donorbox Pro and Premium users. Once the integration is set up, Donorbox automatically sends eligible Gift Aid claims to HMRC in batches – daily, weekly, monthly, or quarterly.
Learn more about how to set it up.
Automating your Gift Aid claims with tools like Donorbox’s HMRC Gift Aid submission helps you:
Gift Aid is simple in theory, but some fundraising activities come with extra rules.
Let’s take a closer look at what you need to know.
Sponsored challenges are eligible for Gift Aid if all travel and accommodation costs are paid by the donor. This portion can’t be counted toward Gift Aid.
Sponsorship payments from a “connected person” are also ineligible for Gift Aid. This includes family members of participants and companies linked to donors.
Pro tip: Add a disclaimer to your marketing materials and sponsorship forms. This can explain that donations from a “connected person” aren’t eligible for Gift Aid. It also shows you’re not trying to claim Gift Aid on ineligible donations.
You can claim membership fees through Gift Aid. To do this, you cannot allow your members to use your services or facilities for personal use.
Because of this personal use rule, Community Amateur Sports Clubs (CASCs) can’t claim Gift Aid for membership fees.
If you’re hosting a fundraising gala or another ticketed event, you may or may not be able to claim Gift Aid on payments. HMRC usually considers these funds raised to be profits and not donations. However, it depends on whether your donors need a ticket to attend your event.
If your supporters need to buy a ticket, you can’t claim Gift Aid. If they’re making voluntary donations to attend, these payments can be eligible for Gift Aid.
If you reimburse your volunteers for expenses, this may be eligible for Gift Aid. Your volunteers can choose to give a payment back to you as Gift Aid. This can be the full reimbursement amount or part of it. For this to work, your volunteers need to have made a payment to your organization.
Here are a few examples of UK organizations using Donorbox to simplify the Gift Aid claims process:
Whether you’re new to Gift Aid or a seasoned pro, there’s no doubt that submitting your eligible donations can be an arduous but ultimately worthwhile process. Increasing a donation by 25% can add up in a significant way – a £50 donation becomes £62.50, a £100 donation becomes £125, and so on.
Donorbox makes Gift Aid easier to manage from the moment a supporter gives. UK donors can mark eligible gifts directly on your donation form or Donorbox Live™ checkout screen. And with automated HMRC submissions available for Pro and Premium users, spend less time on admin and focus more on your all-important mission.
See what one of our users had to say:
Sign up today to start collecting Gift Aid in minutes. For more fundraising tips and strategies, check out the rest of the Nonprofit Blog.
Gift Aid payments are usually made by BACS within 4 weeks if you claim online. If you claim by post using form ChR1, it can take around 5 weeks.
No. Donations must come from eligible UK taxpayers who’ve paid enough Income Tax or Capital Gains Tax to cover the amount your charity claims. You also can’t usually claim Gift Aid on payments made in exchange for goods, services, tickets, or donations made on behalf of someone else.
Raviraj heads the sales and marketing team at Donorbox. His growth-hacking abilities have helped Donorbox boost fundraising efforts for thousands of nonprofit organizations.
Join the fundraising movement! Join the fundraising movement!
Subscribe to our e-newsletter to receive the latest blogs, news, and more in your inbox.
