What is Gift Aid And How Does It Work?

Gift Aid is a form of tax relief when you make a donation to charity. Find out more about how Gift Aid works, whether you’re eligible and what to do if you’re a pensioner. 

What is Gift Aid?

When you make a donation to a charity in the UK, you might be given the option to add Gift Aid to your donation.

Gift Aid increases the value of your donation by 25%, which can add on a considerable amount to your donation. As an example, if you donate £20 and add on Gift Aid, this will increase your donation amount to £25 at no extra cost to you. This is because the Gift Aid comes from the tax you’ve already paid to HMRC.

The value that Gift Aid has for Blesma as a charity, and for the charity sector as a whole, is huge. It’s estimated that Gift Aid is worth over one billion pounds to UK charities each year*.

Every year it’s estimated that more than £500 million in Gift Aid goes unclaimed in the UK**.

If every eligible supporter added Gift Aid when donating to Blesma, it would make a significant difference to the lives of many injured and limbless veterans in the UK. 

By adding Gift Aid to your donation to Blesma:

• £25 would become £31.25 at no extra cost to you. That extra £6.25 could help towards a Support Officer's travel costs when visiting a limbless veteran to provide emotional support and practical advice.
• £50 would become £62.50 at no extra cost to you. That extra £12.50 could improve personal facilities of our Members so they can take part in life enhancing activities such as gardening and woodwork.
• £100 would become £125 at no extra cost to you. That extra £25 could help us run life enriching social activities for our Members.

 

How to add Gift Aid to your donation

When making a donation to Blesma, there are a variety of ways you can add Gift Aid to your donation.

• If you’re donating online at donate.blesma.org you will have the option to tick the Gift Aid box.
• If you’re donating over the phone, please call us on 020 8548 7096, and let us know whether you’d like to add Gift Aid to your donation.
• If you have received a direct mail or magazine from us, it will include a donation form with the option to tick the Gift Aid box.
• If you’d like to send a donation by post but haven’t received a donation form, you can download a donation form and Gift Aid form to print off. Please send your forms to: Blesma, 115 New London Road, Chelmsford, CM2 0QT
  
• More details about how to pay in your money can be found on our Paying In Your Money page. If you have any queries, please don’t hesitate to email fundraising@blesma.org or call 020 8548 7096 and our fundraising team can send you a donation form. 

Do I qualify to add Gift Aid to donations?

If you pay tax on the money you earn from employment, you are eligible to add Gift Aid to your donation. 

If you are self-employed and pay tax on your profits, including services you sell such as through your website, you are also eligible to tick the Gift Aid box. 

Keep in mind that if you contribute more Gift Aid than you pay in UK tax within a tax year, HMRC may ask you to pay the difference. More information can be found at gov.uk/donating-to-charity/gift-aid.

What if I’m a pensioner, can I add Gift Aid?

If you are paying tax on a private pension or a savings account, pay capital gains tax, sold a property or shares, you are still able to add Gift Aid to your donation. 

Please note that this only applies if you have paid enough tax during the year to cover your donation. For example, 25% of your donation. So if you have made a donation of £20 and added Gift Aid, you will need to have paid more than £5 in tax.

What if I accidentally didn’t include Gift Aid on historic donations?

We can claim Gift Aid within four years of your donation to Blesma. If you’ve made a donation to Blesma within the last four years and think you can add Gift Aid, please email fundraising@blesma.org or call 020 8548 7096 and we will be able to get this set up for you.

What happens if I accidentally add Gift Aid to my donation but don’t pay tax?

If you’ve added Gift Aid to your donation but don’t pay tax, HMRC may ask you to pay the difference. For example, if the Gift Aid came to £2.50, you may need to pay this amount. In some cases, the charity may be asked to repay the Gift Aid amount.

If you think you have accidentally added Gift Aid to your donation to Blesma when you shouldn’t have. Please let us know so we can update our records. 

What if I pay a higher-rate of tax, can I claim a higher Gift Aid amount?

If you meet the higher tax rate of 40% or additional tax rate of 45%, we’re still only able to claim the standard Gift Aid amount. However, you can claim back the difference between the tax you've paid on the donation and what we got back when you fill in your Self Assessment tax return with HMRC.

For example, if you donate £800 and Blesma claims Gift Aid at 20%, this makes the gross donation total value £1,000. You can then claim personal tax relief of 20% on the gross donation total of £1,000, making the cost of your donation £600 instead of £800, but the gross donation total will still be £1,000. 

How does Gift Aid work for sponsorships and online fundraising pages?

If you are sponsoring a friend, family member or colleague on a social giving account such as JustGiving or a Facebook fundraiser, you can only Gift Aid your own donations. For example, if you are paying in sponsorship money collected from a number of people, you can only claim Gift Aid when donating your own money. 

This also applies if you are paying in money raised from fundraising activities such as raffles or ticket sales. 

On the other hand, if you are creating an online fundraising page for Blesma through a platform such as JustGiving or Enthuse, make sure to encourage people to add Gift Aid to their donation if they are eligible.

*Source: Swiftaid
**Source: Charities Aid Foundation