Gift Aid

Gift Aid increases the value of donations to charities by allowing them to reclaim the basic rate tax on an individual gift. Extra relief can be claimed on donations from higher rate tax payers.

The Gift Aid scheme is for gifts of money by individuals who pay UK tax. Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities can reclaim the basic rate tax from HMRC on its 'gross' equivalent - the amount before basic rate tax was deducted.

Basic rate tax is 20 per cent, so this means that if a supporter gives £10 using Gift Aid, it's worth £12.50 to your charity.

Therefore, it is important to ask all your donors to fill out a Gift Aid form to say that they would like the tax to be claimed by your charity. Even if they send a one-off donation, it's worth sending them a Gift Aid form through the post with your thank you letter.

There is some useful information for charities on Gift Aid on the Directgov website. Information for individuals on Gift Aid donations is available on the Inland Revenue website.

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