Claiming gift aid on donations when a benefit is received

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.

Excluded benefits

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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