In this section:
- Tax efficient giving to charity: the basics
- Giving to charity through Gift Aid
- Giving to charity through your payslip or pension
- Gifts to charity of land, buildings or shares by individuals
- Leaving gifts to charity in your will
- Giving to charity through your Self Assessment tax return
- Keeping records of your gifts to charity
Keeping records of your gifts to charity
If you want to claim tax relief for donations to charity, you need to keep records of your donations. This will help you claim the correct amount of tax relief and pay the right amount of tax.
This article is written for individual taxpayers (including people in business as sole traders or in partnership) rather than for companies.
On this page:
- Why you need to keep records
- What records you should keep
- Records of Gift Aid donations
- Age-related tax allowances
- Tax credits
- Claiming tax relief for higher rate tax payers
- Backdating a Gift Aid donation
- Records of gifts of land, buildings or shares
- Records of goods sold by a charity on your behalf
- Records of gifts made through Payroll Giving
- Telling HMRC about your gifts to charity
- How long to keep records
- Contacting HMRC
Why you need to keep records
You need to keep records so that you can claim the right amount of tax relief on your gifts to charity, for example you can get tax relief on gifts of land or shares to charity, and if you’re a higher rate taxpayer, you can get tax relief on Gift Aid donation to charities and Community Amateur Sports Clubs (CASCs).
You’ll also need a record of Gift Aid donations if you apply for certain benefits such as tax credits where any donation you give affects the amount of your income.
The amount of your Gift Aid donations will also affect any age-related or married couple tax allowances that you are entitled to.
What records you should keep
For every tax year, you should keep the following records:
- details of Gift Aid donations showing the date, the amount and the recipient charities or CASCs
- legal documents showing the sale or transfer of assets to charity - including share transfer documents or certificates or land transfer documents
- any documentation from a charity asking you to sell land or shares on its behalf
Records of Gift Aid donations
You should keep a record of the total amount of your Gift Aid donations for each tax year. It's important to tell HM Revenue & Customs (HMRC) about your Gift Aid donations if:
- you are entitled to age-related tax allowances, Married Couple’s Allowance or tax credits
- you pay higher rate tax
Age-related tax allowances
If you get age-related allowances, you should tell HMRC about any Gift Aid donations you have made. Giving money to charity using Gift Aid reduces your income when HMRC calculates age-related Personal Allowance or age-related Married Couple's Allowance.
HMRC subtracts the amount you donate plus the basic rate tax from your total income and uses the reduced figure to work out the value of your allowances.
Your allowances may be increased if your income is above the relevant 'income limit'.
How your income affects your Personal Allowance
How your income affects your Married Couple’s Allowance
How your income affects your Blind Person’s Allowance
Tax credits
If you claim tax credits make sure you tell HMRC about the total amount of any Gift Aid donations.
HMRC subtracts the amount you donate through Gift Aid from your total income. This may affect your entitlement to tax credits, as a reduced income means you could qualify for more money through tax credits.
What income to include on your tax credits claim
Claiming tax relief for higher rate tax payers
If you pay higher rate tax you can claim tax relief on any Gift Aid payments you make. Claiming the higher rate tax relief on a Gift Aid payment of £100 reduces your tax bill by £25 (in addition to the £25 tax the charity gets back).
For details on how to claim tax relief, see section below ‘Telling HMRC about your gifts to charity’.Backdating a Gift Aid donation
You can choose to carry back the tax relief, from the tax year in which you made the Gift Aid donations to the previous tax year. When you do this, HMRC treats the donations made in one tax year as if they were made in the previous tax year. You must have paid enough tax in the previous tax year to cover any Gift Aid donations you made that year plus the donations that you carry back.
You can do this for any or all Gift Aid payments you’ve made between the end of a tax year and the date you send in your tax return for that tax year. The latest date for making this choice is 31 January, if you complete your tax return online.
Find out more about backdating Gift Aid donations
Records of gifts of land, buildings or shares
You can claim Income Tax relief equal to the net value of the land, buildings or shares you give to a charity, or sell to a charity at less than their market value. You should keep records of these donations or sales so that you can claim the correct amount of tax relief.
You get the Income Tax relief for the tax year in which the gift or sale was made, at your highest rate of tax.
If you’re selling the land or shares on behalf of the charity
If the charity asks you to sell the land or shares on their behalf you can still claim this relief, as long as you keep proper records of the gift and the charity’s request. For example, keep any exchange of correspondence in which the charity accepts your gift but asks you to sell the asset on their behalf and pass the proceeds to them. Keep transfer documents and paperwork showing payment of the proceeds of the sale to the charity.
For details on how to claim tax relief, see section below ‘Telling HMRC about your gifts to charity’.
If you have already made a gift of land or buildings you can ask for confirmation of the value at the date of transfer from the Valuation Office Agency.
Visit the Valuation Office Agency website
Find out more about giving land, buildings or shares to charity
Records of goods sold by a charity on your behalf
If a charity sells goods on your behalf, and you donate the sale proceeds to them, you can make the donation using Gift Aid. The charity will usually write to you to tell you the sale proceeds of your goods. For example a charity shop must contact you after selling your goods, to give you the option of keeping all or part of the proceeds. You should keep this paperwork.
You may be liable for Capital Gains Tax if you make a profit from the sale and you’ll need to keep appropriate records so that you can declare the capital gain. If you give the assets directly to a charity instead of asking the charity to sell them on your behalf, you will not be liable for Capital Gains Tax.
Find out more about when you have to pay Capital Gains Tax
Records of gifts made through Payroll Giving
You don’t need to put details of gifts made through Payroll Giving on your Self Assessment tax return or tax credits application because the figure of taxable earnings/pension (from your form P60) on which your tax or tax credits are worked out won’t include the income used to make these payments. You should, however, keep records for your own reference.
Find out more about giving to charity through Payroll Giving
Telling HMRC about your gifts to charity
If you normally complete a Self Assessment tax return you can tell HMRC about your gifts to charity - and claim any tax relief - by completing the appropriate section on your tax return.
If you don’t complete a return, you can give the details on form P810 Tax Review - available from your Tax Office. If you pay tax through PAYE you can write to, or telephone your Tax Office and ask them to make a change to your tax code.
Making a change to your tax code Completing your tax return
Find out more about Self Assessment
How long to keep records
If you're not running a business you'll normally have to keep your tax records for at least 22 months from the end of the tax year to which they relate. For example, if you gave a property to a charity in September 2008 you must keep any records relating to its purchase, improvement and disposal until at least 31 January 2011.
If you’re in business (as a sole trader or partnership) you must keep your tax records for at least five years and nine months after the end of the tax year to which they relate. For example, if you made a Gift Aid donation in October 2008 you must keep your records until at least 31 January 2015.
If HMRC makes any enquiries about your tax return you will need to keep your tax records until the enquiries are completed.
Find out how long your company should keep records for
What other records you should keep for your tax return
Contacting HMRC
For more help you can contact the Charities Helpline on Tel 0845 302 0203 (open from 8.00 am to 5.00 pm, Monday to Friday).
