Q. A commercially available item which has an "enhanced" value?
Examples include: a football purchased from a high street sports shop which has been signed by a premier league player.
A. No gift aid is available on any of the price paid.
Q. Charity "Gifts"?
Examples include gifts such as: 2 goats or 20 reading books, either with no accompanying gift or a very minimal accompanying gift such as a fridge magnet.
A. Gift aid will be available, provided that the donor benefit rules are not exceeded and the gift aid declaration is properly completed.
Q. Rounding up a donation?
This is where, after participating in the auction and agreeing a purchase price, the donor then makes an additional donation to the charity to round up the sale price.
A. Gift aid should be available in respect of these additional payments.
If this element is a pure donation to charity then gift aid will be available on the whole of the donated part of the sum.
A commission of 20% is retained by Charity2Charity on round up donations.
Gift aid is only available on the 80% part passing to charity
Q. Pure Donation?
Where a simple donation is made to charity in return for no other product or service.
A. Gift aid will be available on the part of this donation which actually passes to the charity (i.e. the donation minus any commission to Charity2Charity, as above).
Q. Second hand goods?
Items donated to charity which once had a commercial value but are now treated as second hand.
A. No gift aid available.
Note 1: Items with a commercial value are the most complex area.
Where an individual pays in excess of the commercial value of the item then it may be possible to reclaim gift aid in respect of the extra price paid. It may also be possible to recover gift aid on the entire sum paid, provided the commercial value (shop price) of the item does not exceed the "donor benefit rules" (described below)..
Gifts satisfying the "donor benefit rules"
The donor benefit rules:
Where there is a difference between the commercial value (shop price) of the item and the price paid, then the donor benefit rules apply as follows:-
Purchase price
£0 to £100 The commercial value of the item must not exceed 25% of the sale price
£101 to £1000 The commercial value of the item must not exceed £25
£1000 plus The commercial value of the item must not exceed 2.5% of the sale price.
If the commercial value of the item is below the threshold then gift aid is available on the entire sum.
For the gift to satisfy the "donor benefit rules" the donor would have to be paying in the region of 75% more than the commercial value of the item
It is also necessary to satisfy the aggregate benefit rules. Broadly speaking a donor must not receive more than a fixed sum of benefits in any tax year (the limit is currently £500). Up to £500, the donor may receive a benefit. The £500 relates to the commercial value of the items, rather than the price paid.
Gifts not satisfying the "donor benefit rules"
If the gift to charity does not satisfy the "donor benefit rules" then gift aid may be available by splitting the benefit between the commercial value and the donation to charity. This is only available if:
1. The item can be purchased separately.
2. The donor is aware of the commercial value (shop value) of the benefit at the time of the donation.
The donor may then treat part of his payment as buying the benefit and part as a donation to the charity. Gift Aid is available in relation to the donation part of the payment only.
Once all these tests have been satisfied and the donor completes a gift aid form to satisfy the rules of the Gift Aid Scheme then it will be possible for the charity to reclaim the gift aid (either in part or in full).
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