How does Gift Aid work in 2026?

Full answer

Gift Aid is a government scheme that increases the value of charitable donations from UK taxpayers. When you donate with Gift Aid, the charity reclaims basic-rate tax (20%) from HMRC, increasing the value of your gift by 25%. **How the maths work:** - You donate £80 net - HMRC adds £20 (basic-rate tax equivalent) - Charity receives **£100 gross** - The £20 equates to 25p per £1 donated (£20/£80 = 25%) **Making a Gift Aid declaration:** Tick the Gift Aid box when donating — either online, by phone, or in writing. Your declaration confirms you are a UK taxpayer and have paid enough income/capital gains tax in the year to cover the basic-rate reclaim. A single declaration can cover all donations to that charity for the past 4 years and future donations until you cancel it. **Higher-rate taxpayers — extra reclaim:** If you pay 40% income tax, you can reclaim the additional 20% (40% − 20% = 20%) via Self Assessment: - Donate £80 → charity gets £100 → you reclaim 20% of £100 = **£20** back via SA - Net cost of a £100 donation: only £60 **Additional-rate taxpayers (45%):** Reclaim 25% of the gross gift via SA. **4-year backdating:** You can claim backdated Gift Aid relief on donations made in the previous 4 tax years via a Self Assessment return. **Gift Aid Small Donations Scheme (GASDS):** Charities can claim a top-up on small cash/contactless donations (up to £30) without a declaration — up to £8,000 in donations per year under GASDS. **IHT benefit:** If you leave 10% or more of your net estate to charity in your will, the IHT rate on the remainder of your estate reduces from 40% to **36%**.

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