Gift-Aid & Claim Tax-back

            If you are a UK taxpayer, a Charity you help can use Gift Aid to increase the value of your donation by 28%. Here, for every £1 given by individual donors the Charity will receive an extra 28p (whilst the basic rate of tax is 22%). That means that if you give £100, the Charity can claim £28 from the Inland Revenue, and your donation shoots up to £128. If you are a higher rate taxpayer, you can claim a tax refund of 18% of the donation (£18 in this case) on your annual tax return. That is, it costs you only £82 and the Charity gets £128 if you pay 40% tax to the Government.

            Gift Aid is a scheme to encourage individuals and businesses to donate more money to charity. UK charities can claim back the basic rate tax already paid on gifts of money received from individuals who pay or have paid UK tax. The scheme also allows UK companies to make gifts of money to charity before any tax is deducted.