Glossary · UK
What is Gift Aid?
A scheme allowing charities to reclaim basic-rate tax on donations from UK taxpayers, boosting each £1 donated to £1.25.
Full Definition
Gift Aid is the UK government scheme that lets charities and community amateur sports clubs (CASCs) reclaim the 20% basic-rate Income Tax you have already paid on a donation. For every £1 you give, the charity reclaims 25p from HMRC — so a £100 donation becomes £125 at no extra cost to you. You must be a UK taxpayer who has paid at least as much Income Tax or Capital Gains Tax as the charity will reclaim, and you must sign a Gift Aid declaration. If you pay higher-rate or additional-rate tax you can also claim back the difference between your rate and the 20% basic rate through Self Assessment, effectively providing further relief to yourself — on a £100 donation a 40% taxpayer can reclaim a further £25. Gift Aid donations also reduce your adjusted net income, which can restore a lost Personal Allowance or remove the High Income Child Benefit Charge.