New features Videos Knowledgebase Ask the Community



You are here: Overview > Revenue > Gift Aid > Gift Aid Settings > Tax Rates > Add Tax Rate > Add a tax rate

Add a tax rate

1. From Revenue, click Gift Aid settings under Configuration. The Gift Aid Settings page appears.
2. Select the Tax Rates tab.
3. Under Tax rates, click Add. The Add a tax rate entry screen appears.
4. In the Rate field, enter a tax rate, such as “20.” When you save the tax rate, it appears as a percentage in the Tax rates grid.

The tax rate percentage is used to calculate taxes for gifts given during different time periods. When your organisation claims taxes back from the Inland Revenue, you can use this rate and the effective date to determine which rate applies to each date range. The tax rate percentages are used to display Gift Aid tax claim amounts on gift records, Gift Aid reports, and R68 Gift Aid claims. For gifts dated between 6 April 2008 and 5 April 2011, the current tax rate is 20%.

Tip: The tax reclaim amount is calculated with this formula: [Total Gift Amount / (100 - Tax Rate)] x Tax Rate. For example, a donation of £50 would have a tax claim amount of £12.50 using the 20 percent Tax Rate ((50/80) x 20 = 12.5).

5. In the Transitional rate field, enter “2” as the current transitional relief. When you save the tax rate, it appears as 2% in the Tax rates grid.

HM Revenue & Customs offers a transitional Gift Aid relief rate of 2% for gifts dated between 6 April 2008 and 5 April 2011. Gifts dated within this time frame are subject to the current tax rate of 20%. Previously, a 22% tax rate was in effect. Because of the tax rate difference, HM Revenue & Customs automatically gives a transitional relief rate of 2% for all qualified gifts. You do not need to claim this difference.

6. In the Effective date field, enter a future date that the tax rate will be in effect.

When your organisation claims taxes back from the Inland Revenue, you can use the tax rate and the effective date to determine which rate applies to each date range. When you enter a tax rate, an effective date is required. You must enter dates chronologically.

7. Click Save. You return to the Tax Rates tab. In the Tax rates grid, your tax rates and dates appear.