The UK Government allows charities and community amateur sports clubs (CASC) to claim back 25% of donations made by UK tax payers, providing the charity an extra 25p for every £1 donated.  In other words Gift Aid is a way for UK taxpayers to increase the value of their donation to charities. Charities can reclaim 25p from HMRC for every pound donated. So if you donate £10, the charity will receive £12.50.

What are the rules for claiming Gift Aid on donations?

There are three areas to consider in looking at eligibility:

  1. You are an eligible organisation e.g. an Academy or a PTA. 

  2. Funds being recorded are eligible.

  3. Donors are eligible.

1. Are you ready to accept Gift Aid on donations?

Your school is probably already set up to receive charitable donations. But if not, it must be set up and recognised by the Government as a charity or CASC for tax purposes. Here is a concise introduction to doing this.

  1. If you engage in England and Wales in charitable activities as most schools do, and you have an annual income of more that £5,000, then register the school as a Charitable Incorporated Organisation (CIO) with the Charity Commission.

  2. If your charity isn’t a Charitable Incorporated Organisation (CIO) and your income is under £5,000 you don’t have to register with the commission. But you can apply to HM Revenue and Customs to recognise your organisation as charitable so that you can claim back tax on things like Gift Aid donations.

2. Are your funds eligible?

You can claim gift aid on eligible funds.
Eligible funds are listed on the HMRC website here.

3. Is your donor eligible?

The contact person giving the donation needs to be eligible. They must have paid the same amount or more in Income Tax or Capital Gains Tax in the Tax Year in which they are donating.

You will have a completed Gift Aid Declaration form from the donor which will state that they are eligible as above.

Important! As people's Gift Aid status can change, we recommend that you contact your donors annually to ask them to confirm that they are still eligible for Gift Aid donations. 

What must you do?

Collect Gift Aid Declaration Forms

  1. Download the Gift Aid declaration forms that you need from the UK Government's website here: Claiming Gift Aid as a charity or CASC

  2. Collect completed and signed Gift Aid declarations from parents or guardians.

  3. File and keep the Gift Aid declarations securely.

  4. Retain each Gift Aid declaration form for 6 years after the most recent donation you claimed Gift Aid on from the individual on the form.

Set up Gift Aid Eligibility for Pupil Donations

Collect Donations

You can mark donations as eligible when you enter income transactions.

To record income for Gift Aid:

  1. Open Transactions > Enter Income.

  2. Select the Gift Aid Flag in the Details section of the form.This indicates the transaction is eligible for Gift Aid.The eligibility of funds you can claim Gift Aid for are listed on the HMRC website here.

  3. Select the Name or Names to record the income against.Note: Eligibility of Gift Aid donors can be set up before or after you record a receipt as eligible for Gift Aid because you can claim on previous eligible donations once you have received a Gift Aid Declaration. See Set Up Gift Aid Eligibility For Pupils for information on how to set up an eligible Gift Aid donor contact for a pupil name.  

Full guidance on entering income in Tali is available here.

Submit claims for Gift Aid to HMRC

What else can you do?

Backdate Gift Aid Claims

You've closed a donations period but found out since that some transactions were not included in the closed period submission even although they were eligible. Perhaps you have just received the Gift Aid Declaration forms from the pupil's donors. 

Can you include backdated transactions now?  YES!

If you update the Gift Aid donor details for a transaction that falls within a closed period, it will automatically be included within your next submission.  See the article Prepare Gift Aid Claims File to Submit to HMRC for details on how prepare a file to submit to HMRC.

View Gift Aid Claims

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