Often when making a donation, a charity will ask whether Gift Aid can be claimed on the donation. There are certain tax advantages and reliefs to making Gift Aid donations, which are explained in more detail below.
Basic Operation of Gift Aid
Gift Aid is a tax incentive that allows UK registered charities (and charities registered in other EU member states, Norway, Iceland, and Liechtenstein) to claim the basic rate tax (currently 20% in 2018/19) back on the donation from HMRC. For example:
Assume a taxpayer wishes a charity to receive a total of £100. The taxpayer will actually give the charity £80 and the charity will then claim back the £20 from HMRC.
Tax Relief – Higher Rate/Additional Rate Taxpayers
Further tax reli...
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