Gift Aid
Gift aid is the ability of UK registered charities to reclaim the tax relief from money donated to them.
People who donate money must pay UK income tax themselves and complete a gift aid declaration which will include various details about the charity and themselves.
Those organisations who pay higher rate tax can claim extra relief on the donations they receive.
This is a useful way of charities to increase the value of all qualifying donations without it affecting the donor.
How it works
Most of those people who pay tax will pay tax at the basic rate. A donation of £10 from a basic rate taxpayer will have £2.50 added to the donation by the government. They are giving the tax paid by the taxpayer back to the charity.
Gift Aid donations
It is necessary for a taxpayer who gives a donation to charity to complete a Gift Aid declaration. Otherwise the charity will not receive the extra tax back from the government.
Completing the Gift Aid declaration is designed to be a simple matter. But for anything else, as this is a financial issue, people should take advice from an appropriate financial advisor.