Charities are missing out on £600 million in Gift Aid each year

According to figures published by HM Revenue & Customs (HMRC), charities across the country are missing out on valuable Gift Aid each year, because taxpayers are not declaring gift aid when donating to charitable causes.

The research shows that a third of the eligible donations being made to many of the UK’s 200,000 charities did not include Gift Aid. This means that charities are losing out on extra funding worth nearly £600 million a year.

As a result, the Government are now keen to ensure that the public understand the rules around Gift Aid and encourage them to declare Gift Aid on their donations.

Doing so would boost the money that reaches their chosen charity and at no extra cost to themselves.

Exchequer Secretary to the Treasury, Robert Jenrick MP, said: “The UK has thousands of brilliant charities… and through Gift Aid, we are already giving charities an extra £1.3 billion of funding so that they can continue their important work.”

“We know how crucial this funding is; hence we’ve written to 50,000 charities to tell them about the Gift Aid Small Donations Scheme (GASDS), which makes it even easier for charities to claim a 25 per cent top-up on their donations.”

The scheme, introduced in 2013, does not require a declaration to be made for donations worth up to £20, making it simpler for charities to secure additional support through Gift Aid. More information about the Small Donations Scheme can be found here.

Gift Aid allows charities and community amateur sports clubs (CASC) to claim an extra 25p for every £1 donated.

To add Gift Aid to a donation, you must have paid income or Capital Gains Tax in that tax year worth at least the value of the Gift Aid being added, and you must also give the charity permission to claim it. Gift Aid costs no extra to add on to your donation.

Toni Hunter, partner and charities expert at George Hay, said: “Gift Aid is an important source of income for charities, through the provision of tax relief on charitable donations from individuals in the UK.

“It is such a shame that UK charities are missing out on such a vast sum of money – each year – simply because of, in most cases, a lack of understanding about the rules associated with Gift Aid.”

“By educating and improving the knowledge of eligible donors, we could give many of our charities the boost they need in what is already an extremely tough environment.”

Here at George Hay, our charities team have the knowledge and experience to advise you on a wide range of tax reliefs and initiatives, including GASDS. We also provide a full range of tax and accountancy services for charities and not-for-profit organisations so, if you think we can help, please contact us.

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