What Is Gift Aid and How Does It Work?

Gift Aid is a UK government scheme that allows charities to reclaim the basic rate of tax on donations made by UK taxpayers. In practice, this means that for every £1 you donate, the charity can claim an additional 25p from HMRC - boosting your donation by 25% at no extra cost to you.

How Gift Aid Works

When you donate to a charity and tick the Gift Aid declaration, you confirm that you are a UK taxpayer and that you've paid enough Income Tax or Capital Gains Tax in the current tax year to cover the Gift Aid claimed on all your donations.

The charity then claims the tax back from HMRC. For example:

You donate £10
The charity claims £2.50 from HMRC
Total received by the charity: £12.50

Who Qualifies?

To qualify for Gift Aid, you must:

Be a UK taxpayer (Income Tax or Capital Gains Tax)
Have paid at least as much tax in the current tax year as the total Gift Aid claimed on your donations
Make a Gift Aid declaration to the charity (usually a simple tick box when donating online)

Gift Aid applies to donations to registered UK charities and Community Amateur Sports Clubs (CASCs). It does not apply to donations to Community Interest Companies (CICs), as CICs are not charities.

Higher Rate Taxpayers

If you pay tax at the higher rate (40%) or additional rate (45%), you can claim the difference between the higher rate and the basic rate of tax on your donation through your Self Assessment tax return. This means giving to charity can reduce your own tax bill.

How Charities Claim Gift Aid

Charities must be registered with HMRC for Gift Aid. They submit claims - typically quarterly - detailing the donations received with valid Gift Aid declarations. HMRC then pays the charity the additional 25%.

On digital platforms like OneDonate, Gift Aid is processed through SwiftAid for eligible donations to eligible charities. Organisations remain responsible for reviewing the accuracy and eligibility of their records. SwiftAid’s plan, allowance, fees and submission schedule may apply.

Common Gift Aid Questions

Who can claim Gift Aid?

Any UK charity or Community Amateur Sports Club (CASC) registered with HMRC can claim Gift Aid on eligible donations from UK taxpayers.

Does Gift Aid cost the donor anything?

No. Gift Aid is claimed from HMRC, not from the donor. The charity receives the additional 25% at no cost to you.

What if I stop paying tax?

If you no longer pay enough UK Income Tax or Capital Gains Tax to cover the Gift Aid claimed on your donations, you should notify the charity or platform. You may be responsible for any difference.

Key Takeaways

Gift Aid boosts donations by 25% at no cost to the donor
Only UK taxpayers can opt in to Gift Aid
Charities claim the additional amount directly from HMRC
Higher rate taxpayers can claim further tax relief via Self Assessment
OneDonate supports Gift Aid - making it easy for donors and charities alike