For many faith-based organisations, Gift Aid is one of the simplest ways to increase income without asking anyone to give more. Yet a surprising amount goes unclaimed every year. Here's how it works and how to make the most of it.
How Gift Aid works
Gift Aid lets eligible organisations reclaim the basic-rate tax a UK taxpayer has already paid on their donation. In practice, that's worth an extra 25% — so a £100 gift becomes £125 at no extra cost to the giver.
Declarations matter
To claim Gift Aid on someone's donation, you need a valid Gift Aid declaration from them. The donor also needs to have paid at least as much UK tax as you're reclaiming. Keeping clear, current declarations is the foundation of a claim that stands up to scrutiny.
What you can claim on
Gift Aid applies to genuine gifts of money from individuals. It doesn't apply to everything — payments where the donor receives something significant in return, or donations from companies, follow different rules. If you're not sure whether something qualifies, it's worth checking before you claim.
The Gift Aid Small Donations Scheme
Collections and loose cash can be hard to attach declarations to. The Gift Aid Small Donations Scheme (GASDS) is designed for exactly this: it lets eligible organisations claim a top-up on small donations (currently those of £30 or less) without a declaration. There are conditions — including a cap linked to how much ordinary Gift Aid you claim — but for places of worship in particular it can add up to a meaningful sum.
Keep good records
Solid record-keeping is what turns Gift Aid from a worry into a reliable source of income:
- Keep declarations up to date and easy to find.
- Record donations in a way that links them to the right donor and declaration.
- Keep your records for as long as HMRC requires.
Get the foundations right, and claiming becomes routine rather than stressful.
This article is general information, not advice. Gift Aid rules and limits change and depend on your circumstances. Check the current position with HMRC, or talk to us about Gift Aid and we'll help you claim with confidence.