As part of our recent look at some of the complexities around Gift Aid, we know that volunteer expenses can cause confusion. Volunteers sometimes incur expenses…
When someone makes a donation to a charity, they may receive something in return to say thank you. This is known as a benefit. Provided the benefit does not exceed certain limits, the donation will still qualify for Gift Aid. Charities should therefore ensure that the benefit limit has not been exceeded before making a Gift Aid claim.
Some items do not count as benefits and can therefore be ignored, for example:
- An acknowledgement of a donor’s generosity, for example in a printed brochure or on a plaque
- A right of admission to view charity property (subject to certain conditions)
- Fundraising events in honour of a donor
- Naming rights, provided the naming of the building is unsolicited and not expected in return for the donation
Limits that apply to the value of the benefit
There are two limits that apply to the value of the benefit that a donor, or a person connected with the donor, may receive in return for making a donation. These are calculated using the relevant value test and the aggregate value test. If the value of the benefit received exceeds either of these limits, the donation will not qualify for Gift Aid.
Relevant value test
The limits for the relevant value test are shown below. These limits apply separately to each donation. Special rules apply to annualise the amount of certain donations and the value of certain benefits for the purposes of applying the limits.
|Amount of the donation
|Maximum value of benefit|
|£0 – £100
|25% of the donation|
|£101+||£25 + 5% of the donation over £100, up to a maximum benefit value of £2,500|
Aggregate value test
Under this test the value of benefits received by the same donor in one tax year, as a result of making more than one donation to the same charity in that tax year, must not exceed £2,500.
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