What is Gift Aid?
What is Gift Aid?
When you make a donation to us we are able to claim back the tax that you have paid on the donation. This mechanism is called Gift Aid and amounts to an extra 25p for every £1 that you give.
How does it work?
If you give £10 to us and you are a basic rate taxpayer (20%), you will have paid £2.50 in tax on the gross donation (to take home £10, you will have earned £12.50 before tax). As a Charity we are able to reclaim this £2.50 back from HMRC.
Who is eligible?
Gift Aid can be applied to any UK, EU, Norwegian or Icelandic charity that is registered with HMRC.
You must be a UK taxpayer for your donation to qualify for Gift Aid. This can either be Income or Capital Gains Tax, but you must have paid enough in the tax year that you make the donation to at least cover the amount that the charity will claim (25p per £1).
What do I have to do?
You will need to inform us that you are a UK taxpayer and you would like us to reclaim the tax on your donation. You will do this by making a Gift Aid declaration, which can be done by making a donation through our ‘Make a Donation’ page or by completing the Gift Aid Declaration Form below.
Please complete this form, print it off and send it to us with your donation.
Cheques should be made payable to: The Small Grants Fund
Some charities tell me that they can reclaim 28p, why is this figure different?
In the 2008 budget, the basic rate of tax was reduced from 22% to 20%. Whilst this was good news for taxpayers, charities were concerned that this drop would lead to a dramatic loss in revenue from Gift Aid income (i.e they would lose 3p per £1 on every donation). The government therefore announced that they would make up this loss for 3 years to allow charities to adjust to the change. Therefore, until April 2011, the government gave charities an additional 3.2p on top of the standard Gift Aid payment for every £1 that you donated, making the total up to £1.28. This measure was called Transitional Relief. So:
You gave £100
Charity claims basic rate tax on gross gift from HMRC (20% of £125) £25.00
Transitional relief £3.20
Total Charity receives £128.20
What about Higher Rate taxpayers?
If you pay a higher rate of income tax, either at 40% or 50%, you can claim the difference between the basic rate of tax reclaimed by the charity and your highest rate. This can be done via your self assessment tax return. For more information about how to do this, and the amount that this relief could be worth to you, click here.
You can work out how much your donation is worth by using our Gift Aid calculator, on the left hand side of this page.
Source: The Institute of Fundraising