What is Gift Aid?
Gift Aid is a tax relief programme in the United Kingdom that allows charities to claim an additional amount of money from the government on donations made by UK taxpayers. When an individual who is a UK taxpayer donates money to a registered charity, the charity can then claim back the basic rate of income tax (currently 25%) on that donation from the government.
This means that the charity receives 25% more money than the donor initially gave, at no extra cost to you. To qualify for Gift Aid, the donor needs to have paid at least as much in tax as the charity is claiming back.
Gift Aid is a valuable source of income for charities, as it boosts the value of donations. Your contribution, no matter how small, will have a 25% greater impact through Gift Aid.
For example, if you donate £1 RICE will receive £1.25:
How can I Gift Aid to RICE?
When donating cash or a cheque in person to RICE, you must complete a Gift Aid declaration form. Download a copy below or sign one at reception. Online, make sure you tick yes to Gift Aid!
In person donations or mailed cheques:
More about Gift Aid
Please use the links below to read more about how the Gift Aid programme works.
How does a UK tax payer use Gift Aid?
As a UK taxpayer, you can use Gift Aid to boost the value of your donations to registered charities. Here’s how it works:
- Choose a registered charity, such as RICE.
- Make a donation: it must be made out of your own money, and you cannot receive anything in return for the donation, such as goods or services.
- Complete a Gift Aid declaration: In person, this is a form where you confirm that you are a UK taxpayer and that you want the charity to claim Gift Aid on your donation. The declaration will also cover all future donations to that charity, so you only need to complete it once unless your tax status changes. Online, make sure you click yes to Gift Aid.
- Charity claims Gift Aid: Once you’ve completed the Gift Aid declaration, the charity can claim the basic rate of income tax on your donation from the government. For example, if you donate £100, the charity can claim an additional £25 from the government, making the total donation worth £125.
Remember, to qualify for Gift Aid, you need to have paid at least as much in tax as the charity is claiming back. If your tax status changes, you should notify the charity or update your Gift Aid declaration accordingly.
Can a UK tax payer gift aid to multiple charities?
Yes, as a UK taxpayer, you can use Gift Aid to donate to multiple registered charities. Each donation to a different charity will require a separate Gift Aid declaration.
When you make a donation to a charity, they will provide you with a Gift Aid declaration form. This is where you confirm that you are a UK taxpayer and that you want the charity to claim Gift Aid on your donation.
Remember to keep track of your donations and the charities you support, as you may need this information for tax purposes when you file your tax return. Also, ensure that you have paid enough income tax or capital gains tax to cover the total amount being claimed by all the charities combined.
Do I mention it on my tax return?
Yes, if you make donations using Gift Aid as a UK taxpayer, you need to report these donations on your tax return. When you complete your self-assessment tax return, there is a section where you can enter the details of your charitable donations made under Gift Aid. This allows you to claim tax relief on your donations, which can result in reducing your overall tax liability.
By reporting your Gift Aid donations on your tax return, you ensure that you receive the appropriate tax relief and that the tax authorities are aware of your qualifying donations. This way, you can get the benefit of tax relief while supporting the causes you care about through your charitable contributions.
Can I Gift Aid in UK if I am a higher rate tax payer?
Yes, as a higher rate taxpayer in the UK, you can still make charitable donations and gift aid contributions. Gift Aid allows charities to claim back the basic rate tax on your donation, which means they can receive an extra 25p for every £1 you donate, at no extra cost to you.
When you make a Gift Aid donation, you need to declare that you have paid enough income or capital gains tax to cover the amount that the charity will reclaim. This means that if you are a higher rate taxpayer, you will have paid more tax than the basic rate, and the charity can claim the basic rate tax on your donation. However, you won’t be able to claim back the difference between the higher and basic rate tax on your self-assessment tax return.
For instance, if you donate £100 through Gift Aid, the charity can claim an additional £25, making the total donation worth £125 to the charity. As a higher rate taxpayer, you would have already paid 40% tax on the £100, so you won’t receive any further tax relief on that amount.
Remember to keep track of your charitable donations and keep the necessary records, as you might need them for your tax returns or other financial purposes. It’s also advisable to consult with a tax professional or financial advisor for personalized advice on your specific situation.