The short version: Gift Aid is a scheme that lets charities claim extra money from HMRC when you donate. For every pound you give, the charity gets an extra 25p at no cost to you. All you have to do is tick a box.
How does it work?
When you donate and tick the Gift Aid box, you’re confirming you’re a UK taxpayer. The charity can then claim back the basic rate tax on your donation from HMRC. So your £10 donation becomes £12.50 for the charity.
What if you’re a higher rate taxpayer?
Even better. The charity still claims the basic rate, but you can claim back the difference between your tax rate and the basic rate through Self Assessment. So you get money back too.
Can everyone use Gift Aid?
You need to have paid enough UK Income Tax or Capital Gains Tax to cover the Gift Aid the charity claims. If you haven’t paid any tax that year, or the Gift Aid would be more than the tax you’ve paid, you shouldn’t tick the box.
The donation also needs to come from your own money. You can’t claim Gift Aid on money you’ve raised from others or on behalf of a company.
Do you need to do anything else?
Basic rate taxpayers just tick the box. Higher rate taxpayers need to declare donations on their Self Assessment to claim the extra relief.
Want to make sure you’re claiming all the tax relief on your charitable giving? Let us check you’re not missing out.
