Gift Aid: how it works and what higher rate taxpayers can claim
How Gift Aid works, the condition about the tax you have paid and what higher rate taxpayers can do.
How Gift Aid works
GOV.UK says charities and community amateur sports clubs can claim an extra 25p for every £1 you give. It costs you nothing extra: if you give £80, the charity can claim £20 and receive £100.
The tax you must have paid
GOV.UK says your donations qualify only if they are not more than 4 times what you have paid in tax in that tax year, and that you should only sign a Gift Aid declaration if you have paid enough tax to cover what the charity is going to reclaim. If the charity reclaims more than you paid, HMRC may ask you to pay the difference.
What higher rate taxpayers can claim
GOV.UK says higher rate taxpayers can claim back the difference between the tax they have paid on the donation and what the charity got back. You can do this through your Self Assessment return, or by asking HMRC to amend your tax code. The page covers higher rate taxpayers, so if you pay the additional rate, check GOV.UK for your position.
As an illustration, on a gift of £100 including Gift Aid, a higher rate taxpayer at 40% could reclaim the difference between 40% and the 20% the charity has already reclaimed, which is about £20.
Payroll Giving
GOV.UK says that with Payroll Giving you do not pay the difference between the higher and basic rate of tax on your donation, so there is nothing to claim back.
Gift Aid and your other tax
Gift Aid donations also reduce your adjusted net income, which can matter if your income is near £100,000 or £60,000. See the explainers on the 60% tax trap and the High Income Child Benefit Charge.
Check your own figures
The SavingTax app has a free Gift Aid calculator and a Gift Aid guide.
Sources
This page is general information, not financial, tax or legal advice. The example is simplified. Your own position depends on your circumstances. For advice, speak to a qualified professional.