Gift Aid is a means by which a charity can reclaim the basic rate tax that you have paid on your donations to it. This has the effect of increasing the value of your donations by 25% at no extra cost to you. All that is required is for you to do the following two things:
complete a Gift Aid declaration form and forward it to us.
- pay an amount of Income Tax and/or Capital Gains Tax for each tax year (6 April to 5 April) that is at least equal to the total amount of tax that all the charities or Community Amateur Sports Clubs (CASCs) that you donate to will reclaim on your gifts for that tax year. Other taxes such as VAT and Council Tax do not qualify. In short, you have to pay sufficient tax to cover the total amount of tax that will be reclaimed. Clearly charities shouldn’t reclaim more tax than you’ve actually paid. To calculate how much tax a charity will reclaim simply divide your donation by four.
You don’t necessarily have to be working to be paying Income Tax. Apart from tax on income from a job or self-employment, the tax you’ve paid could include: tax deducted at source from savings interest, tax on State Pension and/or other pensions, tax on investment or rental income and tax credits on UK dividends.
Gift Aid can also be claimed for sponsored events.
For more information on Gift AId, see 'Tax relief when you donate to a charity' on the GOV.UK website.