With the end of the tax year imminent, now is a good opportunity for charities to be reminding individual donors of the advantages of the Gift Aid scheme – not just for the good cause itself, but for the donor as well, if they are higher or additional rate taxpayers.
Most charities will know that donations where the giver has ticked the Gift Aid box are uplifted by 25%, and the scheme is a major lifeline for many charities. And yet a report last year revealed that around £560 million of Gift Aid goes unclaimed.
Encouraging donors to opt in to Gift Aid is an important part of boosting income, and as the end of the tax year looms and many individuals will be contemplating their tax returns, now is a great time to point out to donors that they too can benefit from the scheme.
Higher and additional rate taxpayers can claim tax relief on eligible gifts to charities, and these can be substantial: a higher rate taxpayer can claim £25 relief for every £100 donated, and an additional rate taxpayer £31.25. This is in addition to the £25 uplift which the charity receives.
What’s more, taxpayers can claim for overpayment relief going back four years if they didn’t claim for donations made during that period, provided they have kept records of gift-aided donations made during that period.
Of course, charities pointing out this potential largesse from HMRC might also want to suggest that the donor might want to give those extra reliefs to the charity as well, not forgetting once again to tick the Gift Aid box on that new donation!
The tax year ends on Saturday 5th April – so there is still time for fundraising managers to be reminding donors of the advantages of making gift-aided donations in the current tax year.