Gift Aid Benefits Rules

HMRC explains that you can give modest benefits to a donor (or to people connected to the donor) as a token of appreciation for a donation, provided you don’t exceed certain limits. If you exceed those limits, the donation won’t qualify for Gift Aid.

Donor benefit limits

There are two donor benefit limits. If either is exceeded the donation doesn’t qualify for Gift Aid.

The two limits are made up of the relevant value and the aggregate value.

Relevant Value: The value of benefits provided in relation to the amount of a particular donation.

• For donations of £0 to £100 the benefit can be 25% of the donation. This is no change on arrangements prior to April 2007.
• For donations of £101 to £1,000 there is a maximum benefit of £25 (again no change)
• For donations above £1001 there is a 5% maximum value of benefits on the relevant donation subject to the maximum aggregate value of £500 for the donor from the one charity in any given tax year.

Aggregate Value: The overall benefit limit of £250 for a donation has been increased to £500 a for donations made on or after 6 April 2007. This includes the value of all benefits provided by your charity to the same donor in the same tax year as a consequence of Gift Aid donations.

Some items that don't count as benefits

Some items don’t need to be treated as benefits, for example:

• literature describing the work of your charity such as newsletters, annual reports or a members' handbook .
• an acknowledgement of a donor’s generosity say in a printed brochure or on a plaque.

www.hmrc.gov.uk/charities/giftaid-charities/benefits.htm