Complete guide to Gift Aid and tax reliefs for UK charities. Learn how to maximise your charity's tax recovery and comply with HMRC requirements.
UK charities benefit from significant tax reliefs including exemption from corporation tax on charitable income, reclaim of Gift Aid on donations, and relief from VAT on certain supplies. Understanding these reliefs can significantly increase your charity's income.
Gift Aid allows charities to reclaim basic rate tax from donations made by UK taxpayers. For every £1 donated, the charity can reclaim 25p from HMRC, making the donation worth £1.25 to the charity at no extra cost to the donor.
Higher rate taxpayers can claim relief on their donations through their tax return. Charities should encourage donors to claim higher rate relief to ensure they receive the full benefit of their generosity.
Register for Gift Aid, obtain proper donor declarations, and claim tax relief quarterly. Ensure you have a valid declaration for each donation and keep records for at least 6 years.
Most charity income is exempt from corporation tax including donations, fundraising income, and income from charitable activities. Certain trading income may be taxable.
Charities can reclaim VAT on certain purchases through the VAT reclamation scheme. Some supplies to charities are also zero-rated or exempt from VAT.
Charities may qualify for relief from business rates on properties used for charitable purposes. Apply to your local authority for charitable rate relief.
Our specialist charity accountants can help you claim all the tax reliefs you're entitled to. Contact us today.