How to maximise Gift Aid opportunities

Did you know that currently around £564 million in Gift Aid goes unclaimed each year in the UK? Think what that money could fund at your charity. While claiming Gift Aid can be somewhat burdensome for charities, can your charity afford to lose out on an extra 25% of income?

What is Gift Aid?

Gift Aid is a UK government initiative whereby charities can reclaim the basic rate tax from a taxpayer when they donate. This means that for every pound they donate, a charity can claim 25p which means they get £1.25 in total. Gift Aid can only be claimed from donors who have signed a Gift Aid declaration allowing the charity to reclaim their tax on their behalf.

Gift Aid exceptions

There are some donations where Gift Aid cannot be claimed. These include:

• Making a donation in return for something, such as buying raffle tickets, auction items, or event tickets
• Donating on behalf of someone else or a group. For example, if your friend gives you £10 in cash and you donate that money to your own fundraising page online, you cannot add Gift Aid. This is because HMRC needs to know the details of the person who made the donation, not the person paying the money in
• Donating to a fundraiser where the charity has paid for part, or all, of the event. For example, an overseas trek run by a company where the charity has covered the participant cost

How charities can maximise Gift Aid opportunities

Here are four ways that your charity can ensure you’re making it as easy as possible for donors to sign up for Gift Aid so that you can claim an extra 25% at no extra cost to the donor.

Include a Gift Aid declaration on paper sponsorship forms

Not everyone wants to set up an online fundraising page. Or they have set one up, but they also want good old fashioned paper sponsorship forms for friends and family who don’t want to donate online.

In order to claim Gift Aid, the sponsorship form will need to have the following fields:

• Full name
• Home address (including postcode)
• Amount
• Date of donation
• Gift Aid column 

The form must include the Gift Aid statement which states that the donor has read and understood that they must be a UK taxpayer that has paid the same amount, or more, in income tax that year and that they agree to the charity claiming Gift Aid on their donations. 

Embed a Gift Aid declaration into your online donation form

When people come directly to your website to donate, make it as easy as possible for them to Gift Aid their donation by embedding it in your donation form. Here’s a great example from the British Red Cross where the Gift Aid declaration really stands out on the page.

Share the benefits to higher rate taxpayers

Higher rate taxpayers, who earn over £50,270 and under £125,140 a year can claim tax relief on their gross donation at 20%. This is a big benefit to them so be sure to make that clear – whether that’s on your website or on a pledge form at a gala event. 

Take part in the Great Gift Aid Hunt

Each year, between February and April, charities can take part in Swiftaid’s Great Gift Aid Hunt, supported by JustGiving and the Chartered Institute of Fundraising.

Swiftaid is authorised to create Gift Aid declarations on behalf of millions of UK taxpayers. Once unclaimed Gift Aid is found, donors are given the option to opt-out before the declaration is created.

In just three easy steps, charities can find any unclaimed Gift Aid owed to them. In 2023, Swiftaid found £1.3 million in unclaimed Gift Aid for the charities that took part.

Barnardo’s Tara Honeywell, Head of Commercial Ventures at the charity said, "I would highly recommend Swiftaid, for any charity – large or small. The ease of using the product and its ability to identify unclaimed Gift Aid, with very limited resource required from the charities, makes this a hugely valuable initiative."

Signing up to the Great Gift Aid Hunt is an easy way to ensure that charities maximise the Gift Aid that can be claimed on donations made to them in the current tax year.