What is Gift Aid?
Increase the value of your donation by 25%!
If you’re a UK taxpayer, you can increase the value of your charity donations by choosing to donate through ‘Gift Aid’. It’s a great way to increase the value of your donation by 25% at no cost to you!
How Gift Aid works
As a taxpayer, you’ll already have paid tax on any money you donate to charity. When you donate, the charity will ask you whether you want donate through Gift Aid – if you do, they’ll be able to claim back the tax you originally paid at the basic rate of 20%.
Example: You earn £125 and £25 tax is deducted from this at the basic rate of 20%. This leaves you with £100. You then donate the £100 to charity through Gift Aid. The charity can claim an extra £25 (the tax you paid at basic rate) from the government to make your total donation £125.
Make sure you’ve paid enough tax
If you give through Gift Aid, you need to make sure that you’ve actually paid the amount of tax that the charity will claim back. Eg if you donate £100 in a tax year, you must have paid at least £25 tax over the year. The tax could have been paid in the following ways: income, savings, investments or rental income or capital gains.
Higher rate taxpayers
If you pay tax at the higher rate of 40% or above, you can claim back the difference between the higher and basic rate on the value of your donation: