A Complete Guide to Gift Aid For UK-based charities

A Complete Guide to Gift Aid For UK-based charities

Complete Guide to Gift Aid

If you’re a UK-based charity, you can enable Gift Aid to maximize your donations. This is a simple way to boost the donations you receive, with no extra effort on your part.

You can easily enable Gift Aid through Donorbox—we’ll walk you through how at the end of this piece.

What is Gift Aid?

Gift Aid is a form of tax relief. Nonprofits can claim back the tax that their donors have paid on donations.

For every £1 that’s donated to your nonprofit, you can claim back 25p. This allows your nonprofit to boost eligible donations by 25%.

What is Gift Aid

How Does Gift Aid Work?

You need to be a recognized charity to enable Gift Aid. Community Amateur Sports Clubs (CASCs) can also claim.

Not sure if your organization is eligible? HM Revenue and Customs (HMRC) applies the following criteria:

Gift aid for UK nonprofit

When your UK supporters donate to your nonprofit, they can confirm if they’re happy for you to reclaim extra tax.

Assuming they pay the basic rate of tax, they can agree to this.

Their Gift Aid status can be saved, which enables you to reclaim extra tax every time they donate.

Special Rules Around Gift Aid

There are special Gift Aid rules relating to some fundraising activities, including:

Sponsored Challenges

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.

Gift aid for UK nonprofit

Membership Fees

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.

Tickets for Fundraising Events

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.

Volunteer Expenses

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.

Gift aid for UK nonprofit

Are All Donations Eligible For Gift Aid?

Not all donations are eligible for Gift Aid. HMRC can remove Gift Aid from donations at a later date if the department decides they’re not eligible.

A few situations that may cause problems to include:

Donors May Not be Eligible

Even if a donor has agreed for you to claim Gift Aid, HMRC can still remove it if they’re not eligible.

Donors need to have paid Income Tax or Capital Gains Tax that’s equal to the amount you’re trying to claim back. They need to have paid this in the relevant tax year.

Donors Can’t Donate on Behalf of Others

You can’t claim Gift Aid on donations made on behalf of other people.

Imagine this scenario: A friend gives £10 to one of your supporters and asks them to donate through their account. This donation isn’t eligible for Gift Aid because HMRC isn’t able to see the details of the true donor.

Other Things You Can’t Claim Gift Aid On

A few other situations that you can’t claim Gift Aid for include:

  • Donations made for goods or services
  • Good or services that your organization has paid for
  • Nonprofit greetings cards

How to Enable Gift Aid Contributions Through Donorbox

With Donorbox, your donors can easily mark their donation as a Gift Aid contribution.

Here’s how you can make it happen.

Step 1: Go To Your Donorbox Account

To enable Gift Aid, log into your Donorbox dashboard and click on your Account section.

Gift aid for UK nonprofit

Step 2: Check Your Localization Settings

Click into your Localization settings and check your Gift Aid status.

Guide to Gift Aid for UK

Step 3: Check to Enable Gift Aid

In your Localization settings, you can choose to enable Gift Aid for your UK donors by checking this option.

Guide to Gift Aid for UK

Once you’ve enabled Gift Aid, your UK donors can see the Gift Aid options on your Donorbox donation form:

Gift aid UK

This can maximize your donations by 25% at no extra cost to your donors.

Step 4: Spread the Word

Once you have Gift Aid enabled, let your supporters know they can mark their donations with it.

Spread the word on your blog and social media channels, and send emails to past and present donors.

If your UK donors are aware they can easily help maximize donations for you, they’ll likely jump on board.

Pro tip: Use donor management software to segment your donors based on their location. This allows you to tell only your UK donors about Gift Aid. You can do this in Donorbox by asking donors for their location on your donation form.

UK Organizations Using Gift Aid

These UK organizations are using Donorbox to accept Gift Aid:

Greenacres Rescue

Greenacres gift aid


brake UK gift aid

Stop Alabama Rot

Stop Alabama Rot highlight the impact of Gift Aid on donations in their campaign text to show the real-world impact:Tax relief for UK charity

Over to You

Allowing your UK donors to claim Gift Aid is an easy way to boost your eligible donations by 25%. This can maximize the impact of their donation.

It’s easy to set up your Donorbox account to enable Gift Aid contributions.

In just a few clicks, your Donorbox donation form allows your donors to mark their donations as Gift Aid.

Take a look at our nonprofit blog for more resources on getting the most from your fundraising and maximizing donations.

Wagisha J. is the content overseer and writer at Donorbox. She is a marketer specializing in early to mid-stage startup growth. In her free time, she can be found writing, caring for animals, or indulging in fine arts. Say hello to her on Linkedin or Instagram.

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