Crowdfunding for charities: Gift Aid

Gift Aid is a great government scheme that allows charities to claim back 25p for every £1 donated. What you may not know, is that charities are also able to claim Gift Aid as part of a crowdfunding campaign. For those that are eligible, it’s a really simple process and could help you to raise a significant amount more for your cause. For example, if your crowdfunding campaign raises £10,000, you could increase that to £12,500 with Gift Aid!

And the best thing is that, unlike with some other crowdfunding platforms, you claim the Gift Aid directly from HMRC – so there’s no fees to pay! 

To claim Gift Aid, you must set your Crowdfunder project’s category to ‘Charities’. Then, on the same page that you edit your reward/donation options, you can tick the box to claim Gift Aid on the donations made to your project and for any rewards that are eligible.

Eight steps to claiming Gift Aid as a crowdfunding charity

1. Apply to HMRC for recognition as a charity or CASC for tax purposes

You should make sure that your organisation is set up to be eligible to receive Gift Aid as soon as possible. You may also need to register with the Charity Commission if your annual income is greater than £5,000.

2. Nominate an authorised official and/or nominee

3. Check that your rewards and pledge amounts are eligible for claiming Gift Aid

4. When editing your project, tick the Gift Aid box on the page where you edit your rewards/donations to claim Gift Aid on donations.

You will also need to tick Gift Aid for each reward that is eligible. The following declaration will then appear to backers who select Gift Aid when they pledge.

“I confirm that I am UK taxpayer and I understand that if I pay less income tax and/or capital gains tax in the current tax year than the amount of Gift Aid claimed on all my pledges it is my responsibility to pay the difference.”

5. Tick the address box for eligible rewards too. 

You’ll need names and postal addresses of your supporters in order to claim Gift Aid.

6. Run a successful Crowdfunder project!

7. Download your list of supporters.

You can do this once your project has closed successfully. The names and details of those who selected Gift Aid when pledging will appear within this.

8. Make a Gift Aid and tax repayment claim

You can find further information here.

Please note that the purpose of the Crowdfunder project cannot be to support a commercial activity. Limited companies therefore aren’t usually entitled to make a claim. Donations should be made in return for genuine gifts and, as Crowdfunder is a rewards based platform, the value of the reward must be minimal and “modest tokens of appreciation”. Crowdfunder cannot accept any responsibility with regards to Gift Aid claims.

As with all things HMRC, please seek professional advice if you have any questions or concerns.