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WHAT IS GIFT AID?
- Gift Aid Index
- #1 What is Gift Aid?
- #2 Who does Gift Aid apply to?
- #3 How does Gift Aid work?
- #4 How much is Gift Aid worth to this charity?
- #5 What is a Gift Aid declaration?
- #6 Why are Gift Aid declarations important?
- #7 The tax warning to donors
This is an explanation of what gift Aid is and how it helps Logos Apostolic Orphan Aid.
Gift Aid is a simple way for a charity to increase the value of gifts of money received from UK taxpayers.
Gift Aid applies gifts of money paid to a charity and received from UK taxpayers. It does not apply to people who do not pay tax in the UK.
Gift Aid works when a UK taxpayer gives a gift of money to a charity, they have already paid tax on that money. Because charities are generally exempt from tax, they can claim an amount from HMRC equal to the tax paid on that money by the donor. This repayment from HM Revenue & Customs (HMRC) is known as Gift Aid.
By asking donors for permission to reclaim the tax that they have paid on their donation, we can increase the value of your donations by one quarter. From 6 April 2008 the basic rate of Income Tax is 20%. This means that for every £1 qualifying donation received, this charity can claim repayment of 25 pence.
For Example: If you donate £80.
Logos Apostolic Orphan Aid claims £20 (25p for each pound donated) from HMRC.
Your gift is then worth £100 to the orphans we support.
A Gift Aid declaration is a statement by a UK taxpayer asking for their donations to be treated as Gift Aid payments, so that the tax they have paid on the amount donated can be claimed back by the charity receiving the donation.
You can download a gift Aid declaration form for Logos
Apostolic Orphan aid here in three formats, each one is in a zip file:
Microsoft Word.doc || Microsoft Word.docx || Adobe.pdf || or
See our online Gift Aid Declaration form.
It’s important that HMRC can verify the connection between your tax repayment claim and the tax paid by the donor. In other words, every claim must be supported by a Gift Aid declaration that shows who paid the tax in the first place.
When you ask donors to make Gift Aid declarations, you must explain to them that they have to pay, or have paid, an amount of UK Income Tax or Capital Gains Tax that is at least equal to the amount of tax that you, and all other charities and Community Amateur Sports Clubs to whom the donor makes a donation, are going to claim on their donations. The tax can be paid on income, savings and investments (including tax credits on UK dividends) or capital gains. If your claim is more than the tax paid by the donor they will have to pay the difference to HM Revenue & Customs (HMRC). Usually the donor must have paid tax for the same tax year that the donation was made, 6 April to 5 April. In some circumstances the donor can elect to have their donation treated as being paid in the year before you actually receive it. In this case the donor must have paid enough tax in the earlier year to cover your claim. This does not affect you, as your claim will still be for the year when you receive the donation.
HMRC needs to be able to identify the donor from the declaration they make, to check that they have paid enough tax to cover the amount you are claiming in their name.
A Gift Aid declaration therefore needs to show:
The proper name of your charity
The name of the donor, with surname and initials as a minimum
The home address of the donor, with house number/name and postcode as a minimum
The donations that the declaration relates to.