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What is Gift Aid?

 

Gift Aid is a government initiative that allows donations given to charity to be tax-effective. For every £1 donated on eligible donations, a further 25p can be claimed by Prospero World at no cost to the donor. As soon as a donor gives us their permission to claim gift aid on their donation, by completing our Gift Aid declaration form, we can claim the tax back on their donation. There may also be a tax incentive for them.

Donors qualify for Gift Aid if they meet the following criteria:

  • They are a UK taxpayer

  • They pay enough tax* 

*A donor must pay Income Tax and/or Capital Gains tax at a rate at least equal to the amount of Gift Aid claimed on all all their donations in that tax year, otherwise it is their responsibility to pay the difference.

Does every donation qualify for Gift Aid?

Gift Aid can be claimed on both individual and sponsorship donations provided they are gifts from UK tax payers.

Certain donations are not eligible for Gift Aid. If donations fall into any of the following categories, Gift Aid cannot be claimed:

  • If a donor has been charged an entry fee e.g. a ticket for an event

  • If a donor has  bought something

  • If a donor has entered a competition e.g. a raffle or sweepstake

  • If a donation is on behalf of someone else or a group of people e.g. collection from work colleagues

Higher (40%) and Additional (45%) Rate Tax Payers

If a donor pays tax at a rate of 40% or above, they can claim the difference between the higher and basic rate on the total value of their donation. In order for them to receive the additional tax relief they must:

  • Include all Gift Aid donations on their Self-Assessment Tax Return

  • Ask HM Revenue and Customs to adjust their tax code.

Do Donors have to make a declaration for each Donation?

No. To make it easy for both you and Prospero World, the declaration wording normally covers present, future and past donations. We can back-claim four years and we’ll continue to claim until they tell us otherwise, so long as a donor is eligible. Please contact us if you would like to receive our Gift Aid Declaration form.

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