Why ticking the Gift Aid box is important

HMRC have asserted that charities are missing out on up to £600m a year of funding due to donations not being confirmed under the Gift Aid rules.

They said:

The research, published today by HM Revenue & Customs (HMRC), shows that a third of eligible donations made to many of the UK’s 200,000 charities did not add Gift Aid when they could have done. This means that charities are losing out on extra funding worth nearly £600 million a year.

Gift Aid allows charities and community amateur sports clubs (CASC) to claim an extra 25p for every £1 donated. To add Gift Aid to a donation, you must have paid income or capital gains tax that year worth at least the value of the Gift Aid being added and give the charity permission to claim it. Gift Aid costs no extra to add on to your donation.

As a donor, you can only tick the Gift Aid box if you have paid income tax or capital gains tax in the same tax year of at least the amount of the Gift Aid claimed.

Charities will receive 25p from the government for every £1 donated under the Gift Aid scheme. Donors who pay tax at the basic rate will gain no additional tax benefit, however, donors who pay tax at the higher rates will be able to claim the higher rate elements on their tax returns.

The next time you are requested to complete a declaration when you donate or buy from a charity, take time to fill in the form. This will help the charity receive the extra government funding that is presently languishing in the Treasury’s coffers.

The only time you should decline is if you paid little or no tax, as this may result in a bill from the tax office.