Gift Aid is a simple way for charities to increase the value of gifts of money they receive from UK taxpayers.
A Gift Aid declaration is a statement by a UK taxpayer asking for their donations to be treated as Gift Aid payments, so that the tax they have paid on the amount donated can be claimed back by the charity receiving the donation.
Gift Aid is an income tax relief designed to benefit charities . If you’re a UK taxpayer, Gift Aid increases the value of your charity donations by 25%, because the charity can reclaim the basic rate of tax on your gift – at no extra cost to you.
The process is really simple
All you need to do is fill out a Gift Aid Declaration (GAD) form. This is a statement from you to the charity confirming that you want to donate through Gift Aid and receive tax back on your donation.
Your donations won’t qualify for Gift Aid if they’re more than four times what you’ve paid in tax that tax year.
For a charity to claim Gift Aid on your donation, you must have paid UK Income or Capital Gains Tax that financial year. The tax you pay must be equivalent to the amount of Gift Aid the charity will reclaim on your donation that tax year (and will be claimed by other charities and CASCs). VAT and Council Tax don’t meet these criteria.
From April 2016 the income tax personal allowance has increased to £11,000 for individuals born after 5 April 1948. If your income is below £11,000, you won’t be able to claim Gift Aid on eligible donations.
It’s worth noting that you can’t claim Gift Aid on donations on behalf of someone else or a company.