What is Gift Aid?

How does Gift Aid work? 

When a UK taxpayer gives a gift of money to a charity, tax has already been paid on that money. Because Teenage Cancer Trust is exempt from tax, we can claim this money back from HM Revenue & Customs (HMRC). 

How is Gift Aid calculated? 

Get ready for the maths – you may need a calculator for this one! 

• Under HMRC’s Gift Aid scheme, charities can reclaim an amount equal to basic rate tax (20%) on the amount of the donation, plus basic rate tax already paid by that taxpayer on that donation. To do this, you need to use a ‘grossing up’ fraction. 
• Let’s take a £100 donation as an example. 
• The fraction applied to calculate Gift Aid is 100 x 20/80. This is 25% of £100 which equals £25. 

I made a mistake when donating and Gift Aid hasn’t been claimed – what can I do? 

If you have made a donation directly to us (not via a 3rd party such as Justgiving) you can contact us [email protected], informing us that you are a UK tax payer and we will send you a Gift Aid Declaration to complete and on receipt of that we will be able to claim Gift Aid 

How do I know if I am a UK taxpayer? 

You are a UK income taxpayer if: 

• Tax is taken from your wages or pension before you receive them 
• You are required fill in a self-assessment form 
• You have any taxable savings (in a building society, for instance), or a pension plan or investment income 
• You have recently paid any capital gains tax or expect to pay it in the near future.  This could be on the sale of a property or some shares, for example 

Donations made from a joint bank account 

If donations are made from a joint account, we require a declaration from the person who is the tax payer and has paid enough tax in each year to cover the Gift Aid that will be claimed on your joint donations each tax year 

What makes a valid Gift Aid Declaration? 

A Gift Aid Declaration must contain; the name of the Charity, donor’s full name, donor’s home address (at least the house number/name and postcode). 

What if I give through Gift Aid to other charities? 

You can Gift Aid all your donations to different charities – you just have to tick the Gift Aid declaration for each charity you support. Just make sure that you pay enough tax to cover all donations you make under Gift Aid. 

What if I am a pensioner? 

You might still pay tax on a private pension scheme or a savings account or pay capital gains tax if you sell property or shares.  We recommend that you check with your pension’s advisor.  The amount of tax you have paid needs to be equal to or more than the amount we will be reclaiming in Gift Aid each tax year. 

What if I am a higher rate taxpayer? 

Teenage Cancer Trust can only reclaim tax on your gift at the basic rate. If you are a higher rate taxpayer, you can claim the difference between the higher rate of 40% and the basic rate of 20% in your Self-Assessment and make a donation to Teenage Cancer Trust for the difference if you so wish to. 

When can’t Gift Aid be claimed? 

• When you’re donating on behalf of someone else or a group of people. For example, if a friend gives you £10 which you donate to your Fundraising page using your own payment card and details. Even if your friend is a UK taxpayer, the donation is not eligible because HMRC needs to know the details of the person contributing the funds. 
• When you’re donating on behalf of a company.  You can only make Gift Aid declarations on your own taxpayer status when spending your own money.  However, a company can claim tax relief on the donation when donating directly to the charity. 
• When you’re donating to a family member who is taking part in an event and their charity is contributing to the cost.  For example, if you’re donating to a close family member who is doing an overseas trek and the charity is paying for the cost of their trip. 
• When you are donating money from the sale of products or services (e.g. a cake sale).  

Is my signature required? 

No! HMRC only requires a tick box declaration along with your full name and address. 

How do I know if my donations are eligible for Gift Aid? 

You are eligible for Gift Aid if you are a UK taxpayer, paying tax on your salary, savings, investments, private pensions or capital gains. All of these qualify, as long as the total tax you pay is at least equal to the amount Teenage Cancer Trust – and any other charity you donate to – can claim on your donations. Most regular and single personal donations are eligible, for example: Direct Debits, Standing Orders, cheques, cash and text giving. 

Do I have to make a declaration for every donation? 

No. Once you’ve completed and returned your form, you won’t have to do it again for Teenage Cancer Trust. You should however, let us know if your tax status changes by calling 020 7612 0370. 

Are there any hidden charges? 

No. Gift Aid is taken from tax you’ve already paid so there’s no charge to you. It doesn’t affect your tax status either. 

What if I donate via CAF or any other tax efficient giving scheme? 

Your donations are already tax efficient and so we’ll exclude you automatically from Gift Aid. If you have also made gifts by a different method, they may still be eligible. By ticking the box on your declaration form we will not claim anything on your CAF or any other donations made through a tax efficient giving scheme, but will ensure that any other gifts you give are covered. 

Where can I find out more information? 

You can find out more about Gift Aid by visiting HM Revenue and Customs website.

If you have paid a registration fee to Teenage Cancer Trust to take part in a challenge, or are raising a minimum sponsorship to gain entry to an event, there are some Gift Aid rules you and your donors should consider. You can find out more by visiting our Gift Aid for Event Fundraisers webpage.