Thousands of Charities across the UK have the ability to make a claim for Gift Aid on donations made to them, in fact £1.3 billion in tax relief is claimed by charities per year.
New research shows one third of people making donations are not ticking the Gift Aid box. Ticking the box means that the person is allowing the charity to reclaim tax at basic rate on their behalf to top-up the donation and is a declaration that the person has paid income tax/capital gains tax at least equivalent to the donation in that year.
The research shows boxes are going unticked even though people are eligible for Gift Aid top-ups. This shows the UK's 200,000 charities are losing out on funding worth £600 million per year.
We have developed a Gift Aid Calculator to allow people to check if the donations they are going to make, or making, are eligible for Gift Aid. Users need to enter basic information about their gross income in the donation tax year and the donation amount. Multiple income sources across different types including PAYE, Self Employment, Property, Capital Gains, Dividends etc. can be entered. The calculator will check how much the charities can claim back directly and if the user can make a claim for higher relief directly off their tax bill or as a tax refund to them from HMRC.
Donations made through Gift Aid are grossed up at the basic rate, so a £10 donation is worth £12.50 to the charity once they reclaim the £2.50 in tax people have already paid in tax. Higher rate taxpayers need to manually make a claim for the difference and receive the refund directly.
People donating through payslips under Payroll Giving schemes have donations made before tax is calculated. So, a basic rate taxpayer wanting to donate £10 would only need to donate £8 of equivalent post-tax pay. Our payslip calculator now includes a Payroll Giving option.
50,000 charities are now being invited to join a new Small Donations scheme to allow donations of up to £20 to be automatically eligible for Gift Aid without the person donating required to sign a declaration.