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- HMRC - Claiming Gift Aid as a charity or CASC
HMRC Claiming Gift Aid as a charity or CASC: Small Donations Scheme
- Gift Aid - Charities: detailed guidance notes on how the tax system operates
and Returns - Charities: detailed guidance notes on how the tax system operates
- Gift Aid Small Donations Scheme - Charities: detailed guidance notes on how the tax system operates
- Sport England - Other ways to generate funding
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Community sports clubs, groups and organisations work hard to generate income to support their development, running costs and sustainability. If you are registered as a charity or Community Amateur Sports Club (CASC) you could potentially increase your income from donations by 25% through Gift Aid.
Gift Aid is a government scheme that enables charities and
CASCs to claim up to 25% on eligible donations they receive from UK taxpayers. Generally,
for every £1 that is donated, an eligible organisation would be able to reclaim
an additional 25p from HMRC.
Giving and receiving Gift Aid is quite simple. A donor completes a declaration form with key details, including confirmation that they pay enough tax for their donation to be eligible for Gift Aid. The receiving organisation then keeps records of these declarations and donations, to submit to HMRC to receive payment.
Gift Aid can be claimed on donations up to 4 years after the tax year they were received in, so there is no time pressure on busy volunteers if records are kept up to date.
Who can give and receive Gift Aid?
A club or community group is only eligible for Gift Aid if they are a charity or CASC and have been recognised as this by HMRC. If your organisation is neither, it can be useful to research both legal structures to identify if one could be a good fit for you, both now and in the future.
Gift Aid can be claimed on donations from UK taxpayers if they are making the donation on their own behalf and pay enough capital gains or income tax. The donor must complete a declaration confirming that they meet the tax requirements and that they are happy for Gift Aid to be claimed on their donation.
Any individual paying a higher tax rate (40% - 45%) can also claim back the difference between the standard rate used on their donation and the tax rate they pay, which can be extra motivation to donate. For example, someone paying a 40% tax rate donated £100, the donation will be worth £125 to the organisation if Gift Aid is claimed. The donor can also claim back £25 on the donation through a Gift Aid tax rebate.
For more information on donor eligibility requirements, click here.
For donations under £30, Gift Aid can be claimed without a declaration through the Gift Aid Small Donation Scheme (GASDS). As long as your organisation has already claimed Gift Aid during the same tax year, this is a simple way to claim Gift Aid.
Any claims through the GASDS can be made in the same way as Gift Aid, set out below. An organisation can claim up to £2,000 in one tax year through the GASDS, and up to £1,250 for the previous 4 years. A record of donations with receipts, the date of collection and date it was paid into the organisation’s bank account must be kept for at least 2 years after a claim is made.
Click here for more on the GASDS, including eligibility requirements.
Unless their donation is less than £30, donors must complete a Gift Aid declaration form either on paper or online. As a minimum, the declaration should include:
- Your organisation’s name.
- The donor’s full name and address (including house number/name and postcode).
- The donation amount.
- A tick box to confirm the donation is eligible for Gift Aid based on the tax requirements, and that the donor is happy for Gift Aid to be claimed.
- Date of declaration.
If an individual has donated to the organisation within the last 4 years, or is likely to donate again, an option to back claim or extend the declaration to future donations can be added. You can download declaration form templates (single donations or multiple donations) from HMRC.
Your organisation needs to have valid Gift Aid declaration forms for all donations it wants to claim against and all records, including declarations, need to be kept for at least 2 years after a claim has been made.
Donors need to notify you if there any changes to their eligibility or if their name or address changes, so ensure you add a statement about this to the declaration form. HMRC may require the donor to pay any difference in the amount of Gift Aid claimed and tax paid if donations are not eligible.
If you are eligible, you can claim Gift Aid on cash, card, and electronic donations of money. However, there are rules on what doesn’t count as a donation – for example, if the payment is for goods or services, or comes from a limited company.
There are special rules for certain kinds of payments. For example, charity membership fees are eligible for Gift Aid if this is for membership only and doesn’t give the donor access to the charity’s facilities or services. A CASC, however, can’t claim Gift Aid on its membership fees.
Further information on the rules and restrictions of Gift Aid donations is available on the HMRC website.
1. Nominate people to take charge of your organisation’s Gift Aid scheme and claims
This could be your Treasurer, other committee members or trusted volunteers. Make sure they are fully informed regarding eligibility of donations, record keeping and the claims process. Organisations should also ensure processes are in place to safely store any personal data.
2. Develop a declaration form and recording system
Create a declaration form that covers the key requirements, or use a template from HMRC, and develop a system for ensuring that all declarations are stored securely. For more information on keeping records, including how long to retain copies of declarations and other documents, head to the HMRC website. Also, a GDPR toolkit is available from the Sport and Recreation Alliance with more information on secure data handling. Please be aware you may have to fill in some details about your organisation to access the toolkit.
3. Promote Gift Aid for your organisation
Once you are set up to receive Gift Aid, let people know. Look at the best ways to get information about Gift Aid and the eligibility requirements to potential donors. You could do this through internal announcements to all members, newsletters, social media posts or a local press release.
4. Complete and submit your claim form
To claim Gift Aid, you will need to submit a list of all eligible donations, with Gift Aid declaration details, to HMRC. You can do this:
- By post - using the ChR1 form, which you can get by contacting HMRC.
- Online - if you are submitting your claim online, you can do this on the HMRC website. You will need to register for an HMRC online account, if you do not already have one, and will need to have key information available including bank account details. Through the account, you also need to register for ‘Charities Online’.
- Once registered you will need to complete the HMRC ‘schedule spreadsheet’ template and upload this to the Charities Online portal. Up to 1,000 entries can be added to each schedule spreadsheet, and it is good practice to update it regularly. Click here for more information about claiming Gift Aid online.
There is no limit on the number of claims that can be made in a single tax year. However, if you make more than one claim in a year, it is suggested the value of claim should exceed £100.
The members of a club are looking to raise funds to replace club equipment. The club hosts a club social night for members. Each member is asked for an optional £10 donation. 50 members of the club attend and all donate the optional £10. The total value of donations equals £500. If all members sign a declaration to confirm they are eligible for Gift Aid, the club could claim a further £125 in Gift Aid from HMRC. The total value of donations therefore equals £625.
A club have plans to modernise their current pavilion and aim to contribute towards the cost of this redevelopment by raising funds through Gift Aid. To achieve this, the committee asks members to make a voluntary, not compulsory, donation at a suggested value of £30 towards the club’s pavilion modernisation plans. The club will then be able to claim Gift Aid on all eligible £30 donations.
If the club had a total membership of 100 and everyone donated, the donations would equal £3,000. 75 members of the club paid enough tax to be eligible for Gift Aid, so the club can claim Gift Aid against these 75 donations (75 x £30 = £2,250) but not the remaining 25 (25 x £30 = £750). The club would therefore be entitled to claim £562.50 (25% of the £2,250) in Gift Aid from HMRC, meaning the actual value of all donations equalled £3,562.50.
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