How do you feel if asked to pay 10% extra on your ticket price so that gift aid can be claimed? Confused if you’re like me! Once or twice now I’ve been visiting a museum, gallery or even zoo and been invited to pay 10% more than the ticket price so Gift Aid can be claimed. Never has the person making the invitation been able to explain why.
Then someone I respect hugely, who runs a large third sector support organisation told me he’d refused to pay extra so that Gift Aid could be claimed. He didn’t understand why either. So I decided to find out because Gift Aid should be claimed wherever possible. After all, it increases charity income by 25% on qualifying gifts.
Let’s start with the basics. Gift Aid enables charities (and Community Amateur Sports Clubs) to claim 25% extra from HMRC on donations made by UK taxpayers from their taxed income. In other words, you take the donation and divide by four to calculate the Gift Aid you can reclaim. The donor signs a simple form to confirm that they are UK taxpayers and are paying from taxed income.
To make it easier for small charities, £5,000 of donations received can qualify for Gift Aid without any donor paperwork, providing none of them were for over £10.; useful bonus that can be added to collecting tin income.
And why ask for more to claim Gift Aid? Well the answer’s hidden in the HMRC Gift Aid guidance here . Para 3.38.11 describes the ‘admission charge plus 10% option’.
‘This option applies where a member of the public could purchase a right of admission, but instead chooses to make a gift that is at least 10% more than the admission charge, and in return for that donation the charity grants the equivalent admission to view charity property. The whole amount received from a donor is treated as a donation for Gift Aid purposes, not just the additional 10%.’
So if you charge £10 entry to your museum, garden, zoo, art gallery, ancient site or ‘scientific property’, if your visitor chooses to pay an extra £1.00 as a donation, you can claim 25% of £11 as Gift Aid – that’s £2.75; a total income of £13.75 on a £10 ticket.
What are you waiting for?