Gift Aid

[MyNameIsUrl]

This time of year a few of us raise some money for charity by selling homemade cakes, crafts, raffle, the usual fundraisers. We bank the cash in our personal bank accounts, then send the money to the charity via the 'donate' feature of its website.

Can we legitimately tick the 'claim giftaid' box when making the donation? We have each paid more personal tax than the amount reclaimed, but on other income.

We don't declare the income from the cake etc sales on our SA forms - the gross amount is a few hundred pounds each, and we don't deduct the cost of ingredients from the donation.

[mc2fool]

This time of year a few of us raise some money for charity by selling homemade cakes, crafts, raffle, the usual fundraisers. We bank the cash in our personal bank accounts, then send the money to the charity via the 'donate' feature of its website.

Can we legitimately tick the 'claim giftaid' box when making the donation? We have each paid more personal tax than the amount reclaimed, but on other income.

No, because it wasn't your money, nor a gift.

"Donations not eligible for Gift Aid are those made with a company’s money or other peoples’ money. This includes amounts raised through fundraising (eg a bake sale). That means you won’t be able to ask the charity to claim Gift Aid on such funds."

https://www.cafonline.org/my-personal-giving/plan-your-giving/individual-giving-account/how-does-it-work/gift-aid

Now, if you didn't sell the items but just offered them for free and asked for donations (a common trick is to put up a sign that says something along the lines of "Cupcakes: suggested donation £1 per cake") then the persons making the donation can sign a Gift Aid declaration (assuming they've paid the relevant amount of tax).

https://www.charitytaxgroup.org.uk/news-post/2018/gift-aid-coffee-mornings-minister/

[MyNameIsUrl]

Thanks mc2fool for the clarification and the links, very useful. It seems the giftaid form would need to be filled in by everyone who comes and puts even a pound in our kitty, which makes it a bit unworkable.

I suppose if we argued that the money we gave was our own (from other sources of income) then it could be argued the cake sale would be our business and we would have to pay tax on it, cancelling out the giftaid clawback. So that's not an option either.

Thanks for the info though.

[mc2fool]

Thanks mc2fool for the clarification and the links, very useful. It seems the giftaid form would need to be filled in by everyone who comes and puts even a pound in our kitty, which makes it a bit unworkable.

I suppose if we argued that the money we gave was our own (from other sources of income) then it could be argued the cake sale would be our business and we would have to pay tax on it, cancelling out the giftaid clawback. So that's not an option either.

Thanks for the info though.

Well, there is a £1,000 Trading Allowance that we can all use for occasional casual "trading" income that's intended for us to be able to do the odd bit of, say, paid babysitting or flogging off the occasional bit of no longer wanted stuff on eBay or at a jumble sale without having to declare it.

But in this case in selling the cupcakes etc you've (presumably) done so telling the buyers that their money will go to the charity, so the funds were, in fact, never yours, and so didn't form part of your income for you to be able to apply your trading allowance (or gift aid) to them.

[Gerry557]

Sell your cakes and say "you" will make a donation to said charity.

If I sell 5 I'll put £5 in
If I sell 10 I'll put a tenner in etc

Then you make the donation and claim the gift aid.

[Lootman]

Sell your cakes and say "you" will make a donation to said charity.

If I sell 5 I'll put £5 in
If I sell 10 I'll put a tenner in etc

Then you make the donation and claim the gift aid.

But then won't you also owe income tax on what was effectively income to you?

So your charitable donation would be net: the proceeds minus the tax you owe on it, say 20%.

Then the claimed Gift-Aid would gross up the amount by 25% for the benefit of the charity, meaning they end up getting the full benefit of the sale.

Numbers would be different for a higher-rate taxpayer.

[mc2fool]

Sell your cakes and say "you" will make a donation to said charity.

If I sell 5 I'll put £5 in
If I sell 10 I'll put a tenner in etc

Then you make the donation and claim the gift aid.

But then won't you also owe income tax on what was effectively income to you?

Do try and keep up at the back... viewtopic.php?p=626986#p626986