Gift Aid
If you are a basic rate UK taxpayer, for every £1 you Gift Aid to the EBA, we can reclaim 20 pence from the Inland Revenue. This applies to your membership fees or donations to the John Jackson Youth Scholarship Fund or the EBA.
You can use Gift Aid if the amount of Income Tax and/or Capital Gains Tax you’ve paid in the tax year (6 April one year to 5 April the next) in which you make your donation is at least equal to the amount of basic rate tax the charity or CASC is reclaiming on your gift. If you make a number of Gift Aid donations, you will need to consider the tax you’ve paid on each donation on an accumulative basis. If you don’t pay enough tax you may be required to pay any shortfall in tax to HMRC.
You don’t necessarily have to be working to be paying tax. Apart from tax on income from a job or self-employment, the tax you’ve paid could include:
- tax deducted at source from savings interest
- tax on State Pension and/or other pensions
- tax on investment or rental income
- Capital Gains Tax on gains
If you pay higher rate tax, you can claim the difference between the higher rate of tax (40/50 per cent) and the basic rate of tax (20 per cent) on the total (gross) value of your donation to the charity or CASC. You can make this claim on your Self Assessment tax return if you were sent one. For more information see section below ‘Telling HMRC about your Gift Aid donations’.
It’s important to keep a record of the total amount of your Gift Aid donations for each tax year.
You’ll need to let HMRC know about your Gift Aid donations if:
- you claim age-related Personal Allowance, Married Couple’s Allowance or tax credits
- you pay higher rate tax
- you want to carry back a Gift Aid donation
If you normally complete a tax return you can tell HMRC about your Gift Aid donations by completing the section on Gift Aid payments.
There is nothing you need do except tick the Gift Aid box – you will not be contacted by the taxman or anyone else regarding your gift. You can cancel this arrangement at any time by contacting the EBA.