2. Gift Aid

You can increase the value of your charity donations by choosing to donate through ‘Gift Aid’ if you’re a UK taxpayer.

How it works

As a taxpayer, you’ll already have paid tax on any money you donate to charity.

When you donate, the charity will ask you whether you want donate through Gift Aid - if you do, they’ll be able to claim back the tax you originally paid at the basic income tax rate of 20%.

Example

You earn £125 and £25 tax is deducted from this at the basic income tax rate of 20%.

This leaves you with £100. You then donate the £100 to charity through Gift Aid.

The charity can claim an extra £25 (the tax you paid at basic rate) from the government to make your total donation £125.

Make sure you’ve paid enough tax

If you give through Gift Aid, you need to make sure that you’ve actually paid the amount of tax that the charity will claim back. For example, if you donate £100 in a tax year, you must have paid at least £25 tax over the year.

The tax could have been paid in the following ways:

Higher rate taxpayers

If you pay tax at the higher income tax rate of 40% or above, you can claim back the difference between the higher and basic rate on the value of your donation:

Example

You donate £100 to charity through Gift Aid - they claim 20% to make your donation £125. You pay 45% tax so you can personally claim back £31.25 (£125 x 25%).

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