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What is Gift Aid and How Does it Affect My Fundraising?

By: Tracy Whitelaw - Updated: 5 Sep 2012 | comments*Discuss
Gift Aid Gift Aid Scheme Fundraising And

When it comes to fundraising, you want to ensure that you’re being cost-effective down to the very last penny. When effort is being put into earning money for a worthy cause, every possible way of making money needs to be considered carefully along with any ways of saving money or making extra through government means. Gift Aid is basically a tax relief that is allowed on any money that is donated to UK charities. The government treat these charity donations as though the donor has already deducted basic tax from them, which in turn means that the charity can then reclaim this. The benefit of this is that the charity then increase the value of a donation, so if you’re a fundraiser, Gift Aid is definitely something that you should find out more about.

Gift Aid for Individuals

If you’re an individual who enjoys donating money to charity, you should register for Gift Aid so that you are able to help out your charity further. When you give your charity a gift aid declaration, you should include your name, home address, charity name, donation details and confirmation that you’ve paid UK tax to cover the tax that the charity will reclaim. For a basic-rate taxpayer this adds approximately 28% to the value of any donation made under Gift Aid. You can now actually make your claim verbally, but if you choose to do this, the charity you’re claiming Gift Aid on must confirm it in writing and keep a copy of the declaration. You can make a gift aid declaration for any individual donation you make, or you can claim for a series of donations or future donations. Whichever situation you’re in as an individual fundraiser, you should definitely use Gift Aid as a way of maximising your donation.

Gift Aid Scheme for Charities

Gift Aid is a fantastic government scheme for those involved in charities. It encourages individuals and businesses to actively donate money to charity and under the Gift Aid Scheme, all UK charities can claim back the basic rate tax already paid on donations received. It also allows companies based in the UK the chance to make gifts of money to charity before the government deducts any tax from it. There are a number of ways to register for Gift Aid as a charity, but most information can be found on the HM Revenue & Customs website. There are a few mandatory requirements of the Gift Aid Scheme and it is crucial to seek out the information that is relevant to your charity. Primarily, you should keep in mind the following:

  • Only monetary donations are accepted as part of the Gift Aid Scheme
  • You can give donors modest benefits to acknowledge gifts, but these are limited by value
  • You must always obtain a Gift Aid declaration
  • Donations received through Gift Aid must only be used for fundraising or charity purposes
  • Keep detailed records of any Gift Aid claims or any benefits given to supporters
  • Check for special Gift Aid rules that apply to specific donations

The benefits of Gift Aid are undeniable for both charities and individuals. It is definitely worth while getting as much information as you can to see how it can be used effectively in your fundraising cause.

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