This is general information for volunteer treasurers, not tax advice. Check current HMRC guidance and your regulator's guidance before you act on anything here.
A member hands over £20 at the bar, or ticks a box on the renewal form saying 'round up to support the club'. The money lands in the bank the next morning. You have to decide what it is: a donation that Gift Aid can top up, a subscription, or a payment for something the member gets back. The answer changes which line it goes on in the cash book, and whether it can ever appear in a claim.
Start with the £20 that landed in the bank
Most clubs take money from members in several ways at once. Fees, bar tabs, raffle tickets, sponsorship and the occasional open gift all arrive in the same account, often with a reference that says only 'MEMBER J SMITH'. If you record them all as 'income', you cannot later show which part was a genuine gift, and the Gift Aid claim becomes guesswork.
The starting point is simple. A donation is money given with no benefit in return, or with a benefit so small it can be disregarded. Anything a member pays to receive something specific is a payment for that thing, even if the member calls it a donation.
Three receipts and how they are usually treated
Take three receipts that turn up at most clubs.
A bar-night top-up. A member adds £5 to their bar card at a quiz night in a bowls club. They receive drinks in return. This is a sale, not a donation. It goes to bar income, and Gift Aid does not come into it.
A 'round up your fees' donation. A rugby club's renewal form asks members to round their £180 subscription up to £200 'to support the youth section'. Whether this is a donation depends on the wording and on what the member receives. If the rounding is clearly optional, separate from the fee, and the member gets nothing extra for it, it can be treated as a donation. If the club's rules say the rounded amount buys a locker, a seat at the dinner or a higher membership grade, it is part of the payment for that benefit. Keep the fee and the optional gift on separate lines wherever you can.
A raffle ticket. A CASC sells £2 tickets for a hamper. The member gets a chance to win a prize. This is a purchase of a ticket, not a donation, and it sits in fundraising or raffle income. Do not put raffle takings in the donations line, even when a member says they are 'just giving it'.
In each case, ask one question first: what does this person receive back, and was the amount they chose a gift?
How Gift Aid works on a genuine donation
Gift Aid adds 25p to every eligible £1 given by a UK taxpayer. The charity or club claims that 25p from HMRC. The donor pays no extra and does not need to earn more. On a £100 genuine donation from a basic-rate taxpayer with a valid declaration, the claim is worth £25.
Two things must be true before any of that applies. The gift must be a genuine donation, not a payment for something. And there must be a valid Gift Aid declaration on file for that donor, covering the gift you are claiming on. Without the declaration, the gift is still income, but it cannot be claimed.
A tidy record makes this easy to defend if HMRC asks. HMRC expects Gift Aid records to be kept for at least six years.
Why membership fees do not always qualify
Many treasurers assume every membership fee can be claimed. It cannot. A fee that buys membership rights, access to facilities, competition entry, or a share of club benefits is generally a payment for those things. It does not become a donation because the club is a charity or a CASC.
Where a member pays more than the fee and receives nothing extra, the excess may be a donation. HMRC also sets limits on how much benefit a donor can receive before a gift stops being treated as a donation, and those figures change. Check the current rules before you assume a particular gift qualifies. Do not claim a subscription automatically qualifies because the club is registered.
Label donation income separately in the cash book
The claim is only as good as the cash book behind it. Give each type of income its own line or category:
- Subscriptions and membership fees
- Donations (Gift Aid eligible, once the declaration is confirmed)
- Donations (not eligible, for example where a benefit was received)
- Raffle and fundraising income
- Bar and catering sales
When a receipt arrives, put it on the right line at the time, not at year end. Add a short note where the wording is unclear, such as 'round-up on renewal form, no extra benefit'. A committee member reading the accounts in a year's time will then understand why the figure is what it is.
When the claim is built, it should draw only from the donation lines that have a declaration against them. Anything else stays out.
Where to check the rules
HMRC publishes current guidance on Gift Aid, donations and benefits. Read the section that applies to your type of gift, and check the figures there rather than relying on an older summary, including this one. The Charity Commission for England and Wales, the Office of the Scottish Charity Regulator (OSCR) or the Charity Commission for Northern Ireland (CCNI) will also have guidance on how your organisation should record and report income. A CASC should also check its own status requirements with HMRC.
A short checklist for each gift
Keep a simple sheet, or add three columns to your cash book:
| Donor name | Declaration on file (yes/no) | Date received |
|---|---|---|
| J Smith | Yes | 12 March |
| A Patel | No | 14 March |
If the declaration column says no, the gift can still be recorded as a donation, but it will not be claimed until a declaration is collected. Chase those in the spring, not in the week before your examiner visits.
Planning the value before you claim
If you want a rough idea of what your donations might be worth before you start tidying the records, the Gift Aid gap calculator gives a planning estimate. It is free, needs no account and is not a claim. It will not tell you which of your gifts qualify, so the checks above still apply.
This is general information, not tax advice. Check current HMRC guidance and your regulator's guidance before you claim.