Gift Aid

Under the Gift Aid scheme, UK charities can claim back the basic rate tax already paid on gifts of money received from individuals who pay or have paid UK tax.

The scheme also allows UK companies to make gifts of money to charity before any tax is deducted.

In practice this means that for every pound you give, we can claim back tax of 25p, and the government will pay an additional 3p on every £1 up to 5th April 2011, at no extra cost to you.

For higher rate taxpayers there is the added advantage that you can reclaim tax for yourself by entering details of your gift aid donations on your tax self assessment form.

You can donate using Gift Aid if the amount of tax you have paid (in the tax year of the donation) is sufficient to cover the amount of tax the charity will reclaim against the donation. The tax paid by the donor may be income tax, capital gains tax or tax credits on UK company dividends.

Tax years start on 6 April and run until 5 April the following year.

Link to a useful website:

Gift aid - how it works; an overview from HM Revenue and Customs.