If you are a UK taxpayer, Gift Aid offers a simple way to increase the value of your gift to charity by allowing the charity to reclaim the tax on your gift. Currently charities are able to claim an additional 28p from every £1 donated by UK Tax Payers.
You can use Gift Aid if the amount of tax you have paid in any tax year (6 April one year to 5 April the next) is at least equal to the amount the charity is reclaiming on your behalf. You can calculate the amount of tax the charity will reclaim by multiplying the amount you give by 22/78, (22% being the basic rate of tax). For example, if you give £25 to a charity in a particular tax year, they will be able to claim back 25 x 22/78 = £7.05. You need to have paid at least this amount of tax during the same tax year to be able to donate using Gift Aid.
Higher rate taxpayers
If you are a higher rate taxpayer, you can claim the difference between the higher rate of tax at 40 per cent and the basic rate of tax at 22 per cent on the total value to the charity of your donation (the ‘gross donation’). So, using the example above, you can reclaim higher rate relief of £5.77 (18 per cent of your gross donation of £32.05). You make this claim on your Self Assessment tax return.
Non taxpayers
If you do not pay tax, you should not use Gift Aid.
