Gift aid is tax relief on money donated to UK
Gift Aid works by allowing charities to take a donation (which
is money that the donor has already paid tax on), and then reclaim
tax on its 'gross' equivalent (its value before tax was deducted)
at the basic rate. This is 20 per cent from 6 April 2008.
In practice this means that for every pound donated to The
Prince’s Trust using Gift Aid, we can claim an additional 25 pence
from HMRC. Gift Aid can apply to one-off donations or to a series
of regular donations.
Gift Aid declarations
In order for a donation to qualify under Gift Aid the donor
needs to make a declaration saying that they would like to donate
through the Gift Aid scheme and confirming that they have paid
enough UK income or capital gains tax to cover the charity’s claim.
The donor can make a declaration online, or by completing a paper
form, or by making an oral declaration over the phone.
A Gift Aid declaration can apply to:
- a single donation
- all future donations to the same charity
- donations made to the charity in the previous six years or
- a combination of these options.
The Prince's Trust will ask which type of declaration the donor
wants to make.
Who can donate through Gift Aid?
A donor can use Gift Aid if the amount of tax they have paid in
the tax year of the donation is sufficient to cover the amount of
tax that The Prince’s Trust, and all other charities or community
amateur sports clubs the donor may give to will reclaim within that
tax year. The tax paid by the donor may be UK Income Tax, Capital
Gains Tax or tax credits on UK company dividends. Unfortunately
council tax or VAT does not count towards Gift Aid. Tax years start
on 6 April and run until 5 April the following year.
Higher rate taxpayers
A higher rate taxpayer who makes donations through Gift Aid can
claim back the difference between the higher rate of tax at 40 per
cent they have paid, and the basic rate of tax at 20 per cent that
The Prince’s Trust will claim.
The donor may choose to give some or all of this difference to
Donors who complete a Self Assessment tax return will have an
option to claim back the higher rate element of the tax relief on
any donations made to charity. Donors who do not complete a Self
Assessment tax return can call their tax office and have the higher
rate relief reflected in their PAYE tax code.
If you are not a UK taxpayer, then unfortunately you cannot use
Gift Aid. If this is the case, let us know and we won’t keep asking
you about Gift Aid.
For more information about Gift Aid, please contact us on 0845
177 0099 or email firstname.lastname@example.org.