Gift Aid – Changes to benefit rules

Benefit rules changed from April 2019. Donation to a charity qualifies for Gift Aid if it is a payment of a sum of money by an individual who has paid UK income and /or capital gains tax and the gift is not subject to any conditions, providing any benefit to the donor in return or repayment.

There are limits associated to the donor benefit. The limits changed to – For gifts up to £100, the value of the benefit must not be more than 25% of donation. For all gifts over £100, the benefits are limited to 5% of the value of the donation. The previous middle band for gifts between £100-£1000 has been removed.

Samples of Gift Aid declaration are available on HM Revenue and Customs website. The key points are –

1. The form must show donor’s name, address, charity’s name and a description of the donations covered
2. The form must include a note explaining the donor must pay income or/and capital gains tax sufficient to cover the gift aid tax.
3. A record must be kept electronically (scanned or audible record) or in paper form.

On a final note, charities may be able to claim 25% on cash donations of £30 or less and contactless card donations of £30 or less collected on and after 6 April 2019. This is called the Gift Aid small donation scheme. No declaration is required. The charity has a year after the tax year to claim the gift aid.

If you need further information on donations and Gift Aid, please contact Annie Lee at annie.lee@wsm.co.uk