Gift Aid Awareness Day 2023

This year Gift Aid Awareness Day takes place on Thursday 5 October 2023.

Gift Aid has rebounded from the plateau of recent years and Gift Aid claims in the 2022/23 tax year are up 19% from the previous year. Higher rate tax relief on Gift Aid donations is also up by 12% – but with a 40% rise in the number of higher rate taxpayers over the last three years there is still more opportunity for charities to encourage donors to #TickTheBox and maximise the value of their charitable contributions.

To help support you with identifying these Gift Aid opportunities we have set out some useful reminders below.

Supporter schemes

Membership, friends, and other kinds of supporter schemes can potentially qualify for Gift Aid, if the value of any benefits provided to supporters falls below certain limits.

Some benefits provided to members and supporters can be given a nil value for Gift Aid purposes, for example literature describing the charity’s work. There are also special rules for payments to view charity property.

Auctions and sale of donated goods

Although Gift Aid is only available on monetary donations, it may be possible to claim on the sale proceeds of goods donated for charity auctions and shops if structured correctly through the Retail Gift Aid Scheme.

With charity auctions, it may alternatively be possible to claim Gift Aid on sales of bought-in items if the buyer pays above the item's ordinary retail value (and certain conditions are met).

Higher rate tax relief

Donors who pay income tax at the higher or additional rate, can claim additional tax relief on Gift Aid donations in their personal tax returns. Raising awareness of this amongst donors could encourage more generous donations.

The £100,000 income threshold for abatement of the personal allowance can also be extended by making Gift Aid donations, meaning in some cases donors could save up to 60% tax on their gross donations.

Overseas resident donors and charities

Donors who are not UK resident can still make Gift Aid donations if they pay sufficient UK income tax or capital gains tax. Gift Aid donations can also be paid in foreign currency, but not cryptocurrency.

Since April 2023 only donations to UK charities are eligible for Gift Aid, but it is still possible for Gift-Aided donations to reach overseas charities via a UK donor advised fund or another UK charity.

Waived refunds

If an individual decides to waive the right to a refund from a charity, such as for a cancelled event, they may be able to make this a Gift Aid donation. HM Revenue and Customs accept that waived refunds and loans can be eligible for Gift Aid, provided the charity keeps a record of the waiver and subject to all other qualifying conditions.

Corporate donations

Companies can deduct charitable donations from their taxable profits (often known as ‘corporate Gift Aid’), although charities cannot reclaim income tax repayments on these donations. In April 2023 the main rate of corporation tax increased from 19% to 25%, thus increasing the potential value of corporate donations as a form of tax relief.

Gift Aid Small Donations Scheme

Charities collecting small cash or contactless donations can potentially claim up to £2,000 under the Gift Aid Small Donations Scheme. Charities that have more than one community building may be able to claim more than this.

For donations made under the Gift Aid Small Donations Scheme it is not necessary for donors to complete a declaration, making this accessible for bucket collections and their contactless equivalents.

The key thing to remember now and beyond Gift Aid Awareness Day, with any sources of income received from individuals it is important for charities to consider Gift Aid. Make sure any good opportunities are not missed and income generation is maximised.