Top-up payments

1Top-up payments in respect of small donations made to eligible charities

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 - Rmath

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 F1£8,000.

7

This section is subject to sections 4, 6 and 9 (connected charities and charities running charitable activities in community buildings).