From village hall committees in Kemsing and Seal to sports clubs, church groups and local trusts around Sevenoaks, Otford and Westerham, small charities do a great deal with very little. Yet many leave money unclaimed every year simply because Gift Aid feels complicated, or because nobody on the committee is quite sure how it works.

As a long-established local practice that prepares charity accounts and carries out independent examinations, we see this often. This guide explains Gift Aid and the Gift Aid Small Donations Scheme in plain terms, so your trustees can make sure every eligible pound is claimed.

What is Gift Aid?

Gift Aid lets a charity claim back the basic rate tax a donor has already paid on their gift. For every £1 donated by an eligible UK taxpayer, the charity can claim an extra 25p from HMRC. A £20 donation becomes £25 to your charity, at no extra cost to the donor.

To claim, your charity must be recognised by HMRC for tax purposes. Being registered with the Charity Commission is not the same thing, so if you haven’t yet applied for HMRC recognition, that is the first step.

What makes a donation eligible?

  • The donor must be a UK taxpayer who has paid at least as much income tax or Capital Gains Tax in the tax year as the charity will claim on all their donations.
  • You need a Gift Aid declaration from the donor, including their name, home address and confirmation that they understand the tax rules. A single declaration can cover past and future gifts.
  • It must be a genuine gift. Payments for raffle tickets, entry to events or goods bought at a fete are not donations, and there are limits on the value of any thank-you benefits a donor receives.
  • Gifts must be from the donor’s own money, not collected on behalf of others or paid by a company. Companies give to charity differently and don’t use Gift Aid.

The Gift Aid Small Donations Scheme

Many small charities rely on bucket collections, cash at the door or contactless taps at events, where it simply isn’t practical to collect declarations. That’s what the Gift Aid Small Donations Scheme, often called GASDS, is for.

Under the scheme, a charity can claim a top-up payment on small donations of £30 or less made in cash or by contactless payment, without needing a Gift Aid declaration. The limit is £8,000 of small donations per tax year, which means a top-up of up to £2,000 a year.

There are some conditions:

  • your charity must also make a Gift Aid claim on declared donations in the same tax year;
  • the amount you can claim under the scheme is linked to the Gift Aid you claim, so keeping declarations for regular supporters helps unlock the full top-up;
  • additional allowances may apply for charities running activities in community buildings, such as a village hall, which can be particularly helpful for groups that meet in more than one place.

Time limits and record keeping

Claims are made online through HMRC’s Charities Online service. Generally, claims must be made within four years of the end of the charity’s accounting period in which the donations were received, so older gifts may still be claimable if you act soon.

Good records are essential. HMRC can check your claims, so keep the signed or online declarations, a record linking each donation to its donor, and, for small donations, records of the cash or contactless takings, such as dated collection sheets counted and signed by two people.

Common mistakes we see

  1. Claiming Gift Aid on raffle ticket or event ticket sales.
  2. Declarations missing a full home address or postcode.
  3. Claiming on donations from people who don’t pay enough UK tax.
  4. Not claiming at all because “the treasurer was going to do it” and the job fell between committee members.
  5. Forgetting to tell supporters to update their declaration if they stop paying tax.

A note for donors

If you give to local causes and pay higher or additional rate tax, you may be able to claim extra relief on your donations through your Self Assessment tax return. It’s worth keeping a note of the Gift Aided gifts you make during the year.

How Coplestons Accountants can help

We have supported charities, clubs and community groups across Kemsing, Sevenoaks and West Kent for many years. We prepare charity accounts, carry out independent examinations, and can review your Gift Aid processes so your trustees can claim with confidence. If your charity is in its first year of claiming, we can help you put simple systems in place from the start.

Speak to us about your charity. Call 01732 762886 (Monday to Friday, 9am to 5pm) or get in touch online.