Gift Aid

What is Gift Aid?

Gift Aid is an arrangement whereby Charities can claim back the tax paid on monies which they receive. Swindon U3A is a registered charity and can claim Gift Aid on subscriptions. With the current tax rate of 20% this means that for every £100 in subscriptions, which are eligible for Gift Aid, Swindon U3A can receive an extra 25%, i.e. £25.00. This is of substantial benefit to the Swindon U3A for no cost to either the U3A or the member.

Who can tick the Gift Aid box?

Anyone who has enough taxable income to cover any monies they have paid to charities in the current financial year. So if you have given donations and subscriptions of £100 over the year and Gift Aid all of them you must have paid tax on at least £100. If you only paid tax on £100, any donations above £100 would not be eligible for Gift Aid. You can control which organisations will receive Gift Aid by ticking the appropriate box when you make your payment on the appropriate application form.

Please note that if two people pay on one form, there are two Gift Aid boxes on the U3A application form. HMRC have ruled that it is no longer permissible for a person paying tax to pay for more than their own subscription and claim Gift Aid for two people if the second person does not pay tax. There are therefore two Gift Aid boxes on the applications forms, so that each applicant named on the form can register for Gift Aid independently.

How do I know if I pay tax?

Please note that it is the responsibility of an individual to determine if they have sufficient taxable income to allow gift aid to be declared on any charitable payment.

Anyone who receives an income which exceeds their tax allowance will pay tax. Your income is basically split into six categories,

  1. Profits on sales of investments (above the tax free allowance)
  2. Income from investments (any income from an ISA is excluded)
  3. Income from savings (any income from an ISA is excluded)
  4. Income from paid employment or self-employment
  5. Income from the taxable state benefits, (click here for further information)
    • the State Pension (basic and additional)
    • Jobseeker's Allowance
    • Carer's Allowance
    • Employment and Support Allowance (contribution based)
    • Incapacity Benefit (from the 29th week you get it)
    • Bereavement Allowance
    • Pensions paid by the Industrial Death Benefit scheme
    • Widowed Parent's Allowance
    • Widow's pension
  6. Income from a private pension (personal and company)

The income from all these sources is added together and if it exceeds your allowances you will pay tax. For 2017/18 the basic personal allowances are shown in the table below, (click here for further information)

Allowance Total Allowances Total Income (categories 3-6) Tax paid on
£11,500 £11,500 £11,600 £   100

There is also an extra allowance for married couples the value of which depends on when you were born plus other tax allowances (e.g. on savings and investments) to which you might be entitled and which may be considered separately or added to your appropriate personal allowance.

So, if your income from categories 3 to 6 above exceeds your total tax allowance, you will pay tax on any income that exceeds the allowance as shown in the table above. Members born on or after 6 April 1938 and earning exactly £11,600, could Gift Aid their subscription (£0) to Swindon U3A and then up to £100 in total for any other charities. If your income is £11,500 or less you cannot Gift Aid your subscription.