Gift Aid in detail
- Rufus @ PICNIC Solutions
- Feb 11, 2022
- 1 min read
Updated: Feb 17, 2022
Gift Aid is a fantastic program the UK government put in place to encourage donors to give more via a tax relief incentive.
Under the program, UK income taxpayers complete a declaration that they are a UK taxpayer. (see example here) Any donations that the taxpayer makes to a charity are then treated as being made after deduction of income tax at the basic rate of 20%. The charity can then reclaim the basic rate income tax paid on the gift from HMRC.
Amount Donated | Tax Band | Total Donation inc Gift Aid | Tax relief for Donor | Net Cost of Donation |
£100 | 20% | £125 | £0 | £100 |
£100 | 40% | £125 | £25 | £75 |
£100 | 45% | £125 | £31.25 | £68.75 |
"Gift Aid eligibility for donors who live overseas
HMRC allows Gift Aid to be claimed on donations made by donors who live overseas, but who continue to pay taxes in the UK. In order for an organisation to claim Gift Aid on these gifts, the donor’s Billing Address must reflect the country they reside in." Article link - click here for IMIS article
.gov/HMRC guidelines
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