Charities can claim Gift Aid on donations made by eligible taxpayers. This can boost donations by an extra 25% if the donor makes a Gift Aid Declaration (GAD).
To claim Gift Aid, charities need to obtain a Gift Aid declaration from the donor. It should state that the donor:
- has paid the same amount or more in Income Tax or Capital Gains Tax in that tax year; and
- agrees to Gift Aid being claimed.
Charities must keep a record of Gift Aid declarations for 6 years after the most recent donations they claimed.
The Gift Aid Small Donations Scheme can be used on small donations of £30 or less and no GAD is required. The Gift Aid Small Donations Scheme (GASDS) scheme allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payments such as cheque or bank transfer do not count.
The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.