gift aid explained

Gift Aid increases the value of donations to charities by allowing them to reclaim basic rate tax on your gift.

The Gift Aid scheme is for gifts of money by individuals who pay UK tax. Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities take your donation – which is money you’ve already paid tax on – and reclaim the basic rate tax from HM Revenue & Customs (HMRC) on its ‘gross’ equivalent – the amount before basic rate tax was deducted.

Basic rate tax is 20 per cent, so this means that if you give £10 using Gift Aid, it’s worth £12.50 to the charity. For donations between 6 April 2008 and 5 April 2011 the charity will also get a separate government supplement of three pence on every pound you give.

In order to make a Gift Aid donation you’ll need to make a Gift Aid declaration. You will need to complete a form – one form can cover every gift made to the charity or for whatever period you choose, and can cover gifts you have already made and/or gifts you may make in the future.

A Gift Aid declaration includes:

  • your full name
  • your home address
  • the name of the charity
  • details of your donation, and it says that it’s a Gift Aid donation

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