Top-up payments

Top-up payments in respect of small donations made to eligible charities
1
1
A charity is entitled to a payment from HMRC (a “top-up payment”) if—
a
the charity is an eligible charity for a tax year,
b
the charity has made a successful gift aid exemption claim in respect of gifts made to it in the tax year,
c
small donations are made to the charity in the tax year, and
d
the charity makes a claim in respect of small donations made to it in the tax year.
2
The amount of the top-up payment is—
SD × R/(100 - R)
where—
- SD is the amount of the small donations to which the claim relates, and
- R is the percentage rate of the basic rate of income tax for the tax year in question.
3
A charity is not entitled to top-up payments in respect of small donations made to it in a tax year in excess of the maximum donations limit for the charity for the tax year.
4
The “maximum donations limit” for a charity for a tax year is—
a
an amount equal to 10 times the gift aid donations amount for the charity for the tax year, or
b
if less, the specified amount for the charity for the tax year.
5
The “gift aid donations amount” for a charity for a tax year is the amount of the gifts made to the charity in the tax year and in respect of which it has made successful gift aid exemption claims.
6
The “specified amount” for a charity for a tax year is £5,000.
7
This section is subject to sections 4, 6 and 9 (connected charities and charities running charitable activities in community buildings).