Gift aid is tax relief on money donated to UK charities. HMRC treats donations as if the donor has already deducted basic rate tax from them. The charity can then reclaim this tax to increase the value of a donation.
For instance, if a donor gift aids their donation, the charity will receive an additional 28p for every pound the donor gives. The charity can claim gift aid of 25p on every pound and from 6 April 2008 until 5 April 2011 HMRC is also operating transitional provisions for gift aid donations made, paying a government supplement of 3p on every gift aided pound.
Gift Aid was originally introduced in the Finance Act 1990, but was originally limited to cash gifts of £600 or more. The policy was substantially revised in 6 April 2000, when the minimum donation limit was removed. A similar policy applies to charitable donations by companies that are subject to UK corporation tax.
Gift Aid was originally intended for cash donations only. Since 2006 however, HMRC has allowed tax on the income earned by charity shops acting as agent for the donor to be reclaimed, although to operate effectively, the charity needs HMRC-approved systems to be able to record and track the progress of each item from receipt to sale, and confirm with the donor that the donation should still go ahead.
Charity campaigners are calling for an opt-out form of gift aid rather than the current opt-in.
PTA-UK has joined with MyDonate to enable every Parent Teacher Association in England, Wales and Northern Ireland to raise sponsorship money and collect gift aid online.
The amount of money reclaimed in gift aid by Sue Ryder from goods donated to its charity shops has now topped £10m, the charity has announced.
The Payments Council, recently admonished by the Treasury Select Committee over its failed attempt to scrap cheques, has launched a campaign to educate consumers about the different payment methods available to them.
A report following the closed-doors Growing Philanthropy Summit has called for the abolition of payroll giving, compulsory membership of the FRSB and for the Impact Coalition to be merged with the charityfacts website and properly funded.
HMRC has said that Roman Catholic mass offerings are eligible for gift aid along certain caveats.
The National Trust has doubled gift aid revenue in eight of its properties by introducing specialist EPoS systems.
The British public has the capacity to give more, but there is no consensus as to whether and what tax incentives can encourage more philanthropy, it was evident at a meeting of sector representatives in Westminster yesterday.
In light of the recent Catholic Care appeal decision, Robert Ashton asks if donors would rather their money went in pockets of barristers or towards helping gay couples to adopt a child.
HMRC has announced the launch of its new gift aid forms which will replace the forms on the 2009 Gift Aid Toolkit CD and prior internet forms.
With gift aid reform and inheritance tax changes, the arts stand to benefit as a result of this week's Budget, says Christopher Goodhart.
The scrapping of Self Assessment Donate, the mechanism for giving income tax repayments to charity via the tax return, which was announced in Wednesday’s Budget but not given much attention, will see the sector lose around £400,000 a year.
Charities will no longer have to obtain signed gift aid declarations on the first £5,000 of small donations per year in order for those donations to qualify for the tax relief, Chancellor George Osborne announced in his Budget speech today.
The Philanthropy Review has called on the government to reform gift aid guidelines to allow charities to claim gift aid on small cash gifts, advising such a reform could bolster charities’ collective coffers by £175m a year.
New Philanthropy Capital suggests the UK should develop a Bill Gates-style “giving pledge” for home-grown philanthropists, as part of a ten-point plan to boost giving in the country.
Life for a small charity - jack and master of all trades
Think you've got it tough out there? Try being a charity with less than £1m income, says Cath Lee.
Charity shops and joined-up thinking at Sue Ryder Care
Charity shops are not just for retailing, but can engage staff and customers in a wide range of fundraising opportunities. Andy Taylor and Heidi Travis discuss how working on joined-up projects is proving successful for both the fundraising and retail departments in Sue Ryder Care.
The Association of Charitable Foundations plans to oppose the suggestion contained in the Giving Green Paper that foundations should make a minimum annual payout in order to boost the sums flowing to charities.
HRMC will investigate the benefits and cost of allowing online gift aid filing, but will not be funding any gift aid database, the Economic Secretary to the Treasury has stated.
Charity umbrella bodies have been left surprised and disappointed by the government's sudden closure of the Gift Aid Forum.
More people gave more money to charities in the last financial year, but giving levels remain £700m below pre-recession levels.
The chief executive of a small international development charity has called on the government to scrap its international aid budgets, launching an attack against ‘Big Aid’.
Charities could find new opportunities for donors among higher rate tax-paying families not wanting to lose their child benefit under the government’s new plans for state benefits, according to professor of charity studies Gareth Morgan.
UK charities are expecting good times ahead, as an international survey finds that most expect their expenditure and income to increase next year.
The government is under pressure from a consortium of sector bodies to implement gift aid reforms before the next Budget, with a new letter to the Treasury emphasising the need to move more processes online.
The cost of processing gift aid claims to HMRC has risen by more than half over the course of this year, it was revealed during parliamentary questions yesterday.
Gareth Jones explains the think-tank’s proposed system for moving gift aid administration online.
More than £750m is lost every year in gift aid because of an outdated system that disincentivises charities and the Treasury to make the most out of it, according to a report by think-tank ResPublica.
As the charity sector continues to push for gift aid reform, a survey released today has found that 43 per cent of charities admit they are not making the most of the current system.
Increasing the tax for the rich will not mean they will start giving away more money to charity, says Adrian Beney.
The Fundraising Standards Board has shaken off sector speculation that it could be vulnerable to government cuts, with chief executive Alistair McLean saying that total self-sufficiency is within reach.
