Gift Aid is a UK government scheme that allows charities to claim an extra 25p for every £1 donated by a UK taxpayer at no cost to the donor.
When you make a Gift Aid declaration, you confirm you pay at least as much UK income or capital gains tax as the charity will reclaim. The charity then reclaims the tax from HMRC. On a £10 donation, the charity receives £12.50. You pay nothing extra.
If you pay 40% income tax, you can claim additional tax relief through self-assessment. On a £100 Gift Aid donation: the charity claims £25 back from HMRC; you can claim a further £25 relief. The effective cost of a £100 donation is £75.
Make a Gift Aid declaration to each charity you donate to. You can make declarations online, on paper, or verbally (some charities use verbal declarations for regular giving). Keep records of any Gift Aid donations you claim higher-rate relief on.