What is Gift Aid?

OnlyMe_08

Hi

I wish to make a regular monthl;y donation to Cancer Research, but during completion of details, it asks whether I would like to Gift Aid.

Would someone mind explaining this please? What impact would this have on me?

I'm paying normal tax through PAYE.

Thanks

Savvy_Sue

OK, as long as you are a tax payer, then please always tick the Gift Aid box when you are making a donation to a registered charity.

What it means is that if you give £1, and Gift Aid it, the charity can fill in a form and claim from the government the tax you've already paid on that £1.

So your £1 is now worth £1.20 (I think - is tax 20% these days?) *

20p doesn't go far, of course, but if you think of EVERYONE who's a taxpayer doing that on all of their donations, large and small, it's a considerable sum of money!

And it has absolutely NO impact on you. You wanted to give £1, you gave £1, but the taxman gave a bit on top.

I'm really surprised there wasn't a simple explanation of this on their form, TBH!

*I know it's a bit more complicated than this ATM because of transitional relief, but the OP doesn't need to think about that! :rotfl:

JohalaReewi

As Savvy Sue said, if you pay UK income tax and the charity has registered with HMRC, you can 'gift aid' your donation to the charity. This costs you no extra and the charity can claim more money from HMRC.

If the gift aid form has been created correctly, you can choose to either gift aid the one donation, or gift aid this and all future donations automatically (so you only fill in the gift aid form once). If you have made donations in the past, you can also choose to gift aid them retrospectively (up to 6 years in the past).

An added bonus is if you are a higher rate income tax payer, you get tax relief on your gift aided donations (that means you get some money back).

For every pound you donate, the charity can claim an extra 25p from the taxman and the taxman gives an extra 3p on top so your £1 donation is now £1.28 to the charity. If you pay tax at 40%, you should get around 25p back at the end of the tax year so you effectively paid 75p.

HMRC info here...
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/GivingMoneyToCharity/DG_078490

rarrarrar

At present due to transitional arrangements your £1 donation becomes £1.28

Some of the larger charity shops can gift aid your donation of goods.
ie If the items you donated sell for £10 the charity can reclaim £2.80 from HMRC.

Debt_Free_Dreamer

Do be careful where 'Gift Aiding' will imapact on you.

Avoncroft is a visitor attraction in Bromsgrove and has an admission fee that includes a 'Donation' as part of it's charge. The Donation has to be voluntary and allows the attraction to claim the total Gift Aid value for the whole admission price and not just the element relating to the donation.

However, what this means is your admission price is higher.

So if you wanted to be totally MSE, you might say you do not want to gift aid or pay the extra voluntary donation.

or, If you are being ethical and supportive of historical attractions, you would pay the extra and gift aid.

Just thought people should be aware of another slant on the whole gift aid scenario.


This is from their Admission Charge page:-

Our ticket prices include a 10% voluntary donation to allow UK taxpayers to Gift-Aid the admission price. This enables the Museum to claim back 28% of the whole amount from H.M.Treasury. If you are a UK tax-payer, please fill in the gift-aid form in the shop, and if not, the extra donation goes a long way to help Avoncroft in its continuing work of preserving the collection of historic buildings from the West Midlands.

JohalaReewi

I often wondered why gift aided admission was sometimes higher than normal addmission. Fortunately, not all places have this two tier admission scheme.

Also, isn't a '10% voluntary donation' a contradiction in terms? You could make a voluntary donation of £0.00 on top of the admission fee and still make it gift aidable.

Methinks they are trying to get a little bit more extra income. Every penny counts!

fantasia322

Savvy_Sue wrote: »

OK, as long as you are a tax payer, then please always tick the Gift Aid box when you are making a donation to a registered charity.

What it means is that if you give £1, and Gift Aid it, the charity can fill in a form and claim from the government the tax you've already paid on that £1.

So your £1 is now worth £1.20 (I think - is tax 20% these days?) *

20p doesn't go far, of course, but if you think of EVERYONE who's a taxpayer doing that on all of their donations, large and small, it's a considerable sum of money!

And it has absolutely NO impact on you. You wanted to give £1, you gave £1, but the taxman gave a bit on top.

I'm really surprised there wasn't a simple explanation of this on their form, TBH!

*I know it's a bit more complicated than this ATM because of transitional relief, but the OP doesn't need to think about that! :rotfl:

I'm not sure but I think there is no explanation give about gift aid in detail as it constitutes financial advice.
For example (as an employee of a professional fundraising organisation) we always assk about gift aid when someone donates and ask if they are a tax payer, but it gets technical when someone says they are on benefit (a lot of benefits are taxed but we are NOT allowed to tell then donor this as it constitutes as financial advice) and we are not allowed to give them this info

Savvy_Sue

OK, this is what (I think) our form says at the moment:

Are you a UK taxpayer?
If so, you can use Gift Aid to make your donations go further by completing this declaration. If you Gift Aid your donation, we can claim Gift Aid tax relief of 25p on every pound you give. HMRC will also be operating transitional provisions for Gift Aid donations made from 6 April 2008 until 5 April 2011, paying a Government supplement of 3p on every pound you give. To qualify for Gift Aid, what you pay in income tax or capital gains tax must at least equal the amount we will claim in the tax year (currently 25p for each £1 given). So just tick here. It’s that simple.


That's what I mean by a simple explanation!

fengirl_2

I don't know of any benefits which are taxed, although some benefits are taxable. Two different things. The short answer is that if the individual actually pays tax, either by deduction at source or through self assessment, then they can gift aid their donation. If they have taxable income, eg JSA but dont actually pay tax (because they are under the tax threshold, or are a tax evader), then they can sign the gift aid declaration but should expect a bill from the tax person in due course.
Simples.

JohalaReewi

To be precise, it is Income Tax not just any old UK tax. We all pay lots of taxes (like NI, VAT, etc.) but techically, the charity can only claim the gift aid from HMRC if the person has paid at least that much income tax.

soba

Is it possible to apply Gift Aid to the subs scouts pay each week? Or is this not a donation and therefore the Gift Aid scheme does not apply?