Estimates published by HMRC indicated that gift aid paid to charities increased by about 10% to £1.88bn in the 2025-26 tax year.
With increased difficulties in obtaining funding, charities should ensure they are taking full advantage of gift aid. Below are key opportunities for your charity to maximise the funds it receives from HMRC through gift aid claims.
The Gift Aid Small Donations Scheme (GASDS)
Payments made by HMRC under GASDS remained steady at £40m, a prime opportunity some charities may not be taking full advantage of.
GASDS is a scheme available to charities that also claim gift aid to enable them to claim a top-up payment on certain small cash donations received, including contactless donations, collection tins and other cash receipts. Claims can be made for individual donations of £30 or less, collected in the UK.
The maximum amount of donations that can be included in a GASDS claim is usually £8,000 per tax year, worth up to £2,000. Charities operating out of more than one “community building” may be able to access multiple allowances.
Waived refunds
Where your charity has cancelled ticketed events or other fee-paying activities and the donor chooses to donate the refund, gift aid may be claimable. The charity must hold a valid gift aid declaration for the individual, a record of the waiver, and meet the other requirements for gift aid to make the claim.
Individual donors waiving the right to a repayment of a loan made to your charity may also attract gift aid, subject to certain conditions.
Gift aid cannot be claimed where no physical payment was originally made to the charity, such as volunteers waiving expenses. The expenses must first be repaid, then donated back to the charity.
Donations from overseas individuals
Where donors provide a non-UK address as part of their donor record, a charity should carry out additional checks to see if gift aid is claimable. Do not assume an overseas address blocks a gift aid claim.
To claim an overseas donation, the charity should ensure that the donor fully understands they need sufficient UK tax liability in the relevant tax year for gift aid to be claimed, in addition to baseline administrative requirements.
Retrospective claims and missing or incomplete records
Gift aid can be claimed retrospectively within the relevant time limits:
- Trusts: four years from 5 April in which the donation was received;
- Corporates: four years from end of accounting period in which the donation was received;
- GASDS: two years.
A gift aid declaration can include wording to allow claims to be made on all previous and future donations. This means that, when a donor provides a declaration, there may be opportunity to make claims on their previously unclaimed donations.
Follow up with donors if there is any missing or unclear information from their gift aid declaration. Where donors have not completed a gift aid declaration, check to see if they are eligible. If you think there is an opportunity, then take the initiative and contact your donors.
There are providers, such as Swiftaid’s Great Gift Aid Hunt, who offer services to do this on behalf of the charity.
Membership subscriptions
Don’t assume gift aid cannot be claimed on membership subscriptions. The guidance is complex and HMRC are getting stricter with such claims, but it could be worth reviewing any benefits provided to members or considering a different pricing structure to be eligible.
Although always implied, HMRC recently updated its guidance to explicitly state that a charity must, at the time members join, clearly delineate and advertise the basic cost of the membership subscription from the cost of any other benefits that would not fall within the normal benefit limits.
This might include the provision of facilities, services classes, training or other activities. The membership element cannot be split out retrospectively. The provision of periodic newsletters explaining the work of the charity, or opportunities to visit and view the work of the charity, can usually be disregarded.
Alice Palmer is social purpose senior manager at HaysMac
