Charities missing £600m of Gift Aid funding

 In news, updates

HM Revenue & Customs (HMRC) has today launched a drive to encourage greater take up of the Gift Aid scheme.

The call comes after research by HMRC showed that charities are losing out on potentially hundreds of millions of pounds in extra funding. The government department says that a third of eligible donations made to many of the UK’s 200,000 charities did not add Gift Aid when they could have done. This means that charities are losing out on extra funding worth nearly £600m a year.

Exchequer Secretary to the Treasury, Robert Jenrick MP, said: “The UK has thousands of brilliant charities, all working hard to make people’s lives better. Through Gift Aid, we are already giving charities an extra £1.3bn of funding so they can continue their important work.

“We know how crucial this funding is. This is why we’ve just written to 50,000 charities to tell them about the Gift Aid Small Donations Scheme, which makes it even easier for charities to claim a 25% top-up on their donations.”

Gift Aid allows charities and community amateur sports clubs (CASC) to claim an extra 25p for every £1 donated. To add Gift Aid to a donation, you must have paid income or capital gains tax that year worth at least the value of the Gift Aid being added and give the charity permission to claim it. Gift Aid costs no extra to add on to your donation.

HMRC is continuing to work closely with charities to ensure they get the most out of Gift Aid, including making sure their donors understand the rules, and they fully benefit from the support it gives.

The department has also written to 50,000 charities to promote the Gift Aid Small Donations Scheme, introduced in 2013, to explain how easy it is to claim a 25% top-up on cash donations. The scheme does not require a declaration to be made for donations worth up to £20, making it simpler for charities to get extra support through Gift Aid.

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