What is Gift Aid?

How Gift Aid works

When you give to a charity, you have usually already paid tax on that money. Gift Aid lets the charity claim that basic rate tax back from HMRC.

For every £1 you give, the charity can claim an extra 25p. It does not cost you anything extra.

Community amateur sports clubs (CASCs) can claim Gift Aid in the same way. The charity or club needs an HMRC charity reference number to claim.

Who can use Gift Aid

You must have paid tax. Your donations qualify as long as they are not more than 4 times the tax you paid in that tax year.

Example: if you paid £500 tax this year, Gift Aid can be added to up to £2,000 of donations.

If the charity gets back more tax than you paid, HMRC may ask you to pay the difference. So only tick the box if you are paying enough tax.

The Gift Aid declaration

To use Gift Aid, you fill in a short declaration for each charity. This is often a tick box on a form or website. One declaration can cover:

• the donation you are making now
• future donations
• donations made in the last 4 years

If you pay higher rate tax

The charity only claims tax at the basic rate. If you pay tax at a higher rate, you can claim the difference for yourself.

GOV.UK example: you give £100. The charity claims Gift Aid, making it £125. You pay 40% tax, so you can personally claim back £25.

How to claim your extra relief

• In Self Assessment: include your donations on your tax return. You can also claim for donations made in the current tax year up to the date you send your return, in some cases.
• Not in Self Assessment: contact HMRC. You can claim £5,000 or less by phone, or more than £5,000 in writing. You can also ask HMRC to change your tax code.

Things to know

• Tell the charity about any tax year when you did not pay enough tax, for example after retiring or losing your job.
• Other ways to give tax free include Payroll Giving (straight from your wages or pension), giving land, property or shares, and leaving gifts in your will.
• Payroll Giving cannot be used for sports clubs.
• Companies have different rules. This guide is for individuals, sole traders and partnerships.
• Across the UK. Gift Aid works the same way in England, Scotland, Wales and Northern Ireland.

Related guides

• Do you pay Inheritance Tax on gifts?
• What are the Income Tax rates?
• When do I need to register for Self Assessment?
• How does the Personal Allowance taper work over £100,000?

Where this comes from

• Tax relief when you donate to a charity: Gift Aid (GOV.UK)
• Tax relief when you donate to a charity (GOV.UK)