Gift Aid explained: how it works, and when it applies
Ticking one box can make a £10 donation worth £12.50 to a charity. Here is how Gift Aid works, who it is for, and why not every organisation can claim it.
Illustrative image.
The short answer
Gift Aid lets UK charities and community amateur sports clubs claim an extra 25p from HMRC for every £1 donated by a UK taxpayer, at no cost to the donor. You must have paid enough Income Tax or Capital Gains Tax in the tax year to cover the amount claimed. Higher and additional rate taxpayers can claim extra relief through their tax return. Only organisations recognised by HMRC as charities can claim.
Key points
- Gift Aid adds 25p to every £1 you give, paid by HMRC to the charity.
- You must be a UK taxpayer who has paid enough tax to cover it.
- Higher-rate taxpayers can claim back the difference through Self Assessment.
- A simple declaration is needed, and you must tell charities if your tax situation changes.
- Only organisations recognised by HMRC as charities can claim Gift Aid.
If you have ever been asked "are you a UK taxpayer?" when donating, you have met Gift Aid. It is one of the simplest ways to make a gift go further, and it costs the donor nothing.
How Gift Aid works
When you donate, you have normally already paid tax on that money. Gift Aid (opens in a new tab) lets the charity reclaim the basic rate of tax from HMRC. In practice, that means the charity receives an extra 25p for every £1 you give.
- You give £10. The charity claims £2.50 from HMRC. The charity receives £12.50.
- You give £100. The charity receives £125.
Who can use Gift Aid
You can use Gift Aid if you have paid at least as much Income Tax or Capital Gains Tax in the tax year as the charity will claim on all your donations. If you do not pay enough tax, you should not make a Gift Aid declaration, because you may have to pay back the difference.
If you pay tax at a higher rate
Higher and additional rate taxpayers can claim the difference between their rate and the basic rate on their donations, usually through a Self Assessment tax return. You can also choose to have that relief treated as a donation to the charity.
The declaration
To claim, a charity needs a Gift Aid declaration from you. It is usually a short statement you tick or sign when you donate. You should tell the charity if you stop paying enough tax, change your name or move house.
Which organisations can claim it
Only organisations that HMRC recognises as charities, and community amateur sports clubs, can claim Gift Aid. That usually follows registration with the relevant charity regulator.
This is why we are clear about it: The Light Of God cannot claim Gift Aid yet, because we are not yet a registered charity. We will not ask you for a Gift Aid declaration until we can use it properly. When that changes, we will say so on our donate page and our transparency page.
Questions people ask
Are charity donations tax deductible in the UK?
Not in the same way as some other countries. In the UK, Gift Aid lets charities reclaim basic rate tax on your donation, adding 25p per £1. Higher-rate taxpayers can claim extra relief through their tax return.
How much is Gift Aid worth?
Gift Aid adds 25p to every £1 donated by an eligible UK taxpayer, so a £10 gift becomes £12.50 for the charity.
Can I claim Gift Aid if I don't pay tax?
No. You need to have paid enough Income Tax or Capital Gains Tax in the tax year to cover the Gift Aid claimed on all your donations.
Can The Light Of God claim Gift Aid?
Not yet. Only organisations recognised by HMRC as charities can claim Gift Aid, and The Light Of God is not yet a registered charity.
Sources
- Tax relief when you donate to a charity: Gift Aid, GOV.UK
- Tax relief when you donate to a charity, GOV.UK
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