Key takeaways
- Gift Aid lets a charity claim basic rate tax on your donation, so a £100 gift becomes £125 at no extra cost to you.
- You must have paid at least as much Income Tax or Capital Gains Tax in the year as the charity reclaims.
- Higher and additional rate taxpayers can claim extra relief, worth £25 or £31.25 on a £100 donation, through Self Assessment.
- Gift Aid donations extend your basic rate band and reduce adjusted net income, which can help with the £100,000 taper and the Child Benefit charge.
- You can elect to treat a donation as made in the previous tax year if you file that year's return on time.
Gift Aid is the simplest tax relief there is: tick a box and a charity receives a quarter more than you gave. For taxpayers on higher rates there is a second benefit that many forget to claim. This guide explains both, and the one condition that catches people out.
How Gift Aid works
When you give money to a UK charity or community amateur sports club and make a Gift Aid declaration, the charity can reclaim basic rate tax on the gross equivalent of your donation from HMRC.
| You give | Charity reclaims | Charity receives |
|---|---|---|
| £10 | £2.50 | £12.50 |
| £100 | £25 | £125 |
| £1,000 | £250 | £1,250 |
The donation is treated as if you gave the gross amount after paying basic rate tax on it. The charity reclaims that tax.
The tax you must have paid
Gift Aid is only valid if you have paid at least as much Income Tax or Capital Gains Tax in the tax year as all the charities you have given to will reclaim. If you donate £2,000 in a year, the charities will reclaim £500, so you need to have paid at least £500 of tax.
Council Tax and VAT do not count. Non-taxpayers, including many pensioners whose income is below the Personal Allowance, should not make Gift Aid declarations. If you do and have not paid enough tax, HMRC can ask you to pay the difference.
Extra relief for higher and additional rate taxpayers
If you pay tax above the basic rate, you can claim the difference between your rate and the basic rate on the gross donation.
| Your rate | Donation | Gross donation | Your extra relief | Net cost of a £125 gift to the charity |
|---|---|---|---|---|
| Basic rate (20%) | £100 | £125 | £0 | £100 |
| Higher rate (40%) | £100 | £125 | £25 | £75 |
| Additional rate (45%) | £100 | £125 | £31.25 | £68.75 |
The relief is given by extending your basic rate band (and additional rate threshold) by the gross donation, so more of your income is taxed at 20% rather than 40% or 45%.
How to claim it
- Self Assessment: enter the total of your Gift Aid payments in the year on your return.
- No Self Assessment: ask HMRC to adjust your tax code, or contact HMRC to claim.
Scottish taxpayers claim relief at their highest Scottish rate in the same way.
Gift Aid and adjusted net income
The gross value of Gift Aid donations is deducted when working out adjusted net income. That can:
- restore some or all of the Personal Allowance for income between £100,000 and £125,140, giving effective relief of 60% on donations in that band
- reduce or remove the High Income Child Benefit Charge
Carrying a donation back to the previous tax year
You can elect to treat donations as if made in the previous tax year, as long as you make the election on the earlier year’s Self Assessment return and file it by 31 January after that year ends. This is useful if your income was higher last year, or if carrying back reduces last year’s tax bill before it is due.
Payroll giving
If your employer runs a payroll giving scheme, donations are taken from your gross pay before Income Tax. Relief at your highest rate is given automatically, with no Gift Aid declaration needed and nothing to claim.
Gifts of shares and property
Instead of cash, you can give listed shares, unit trusts or land and buildings to a charity. You get Income Tax relief on their value and pay no Capital Gains Tax on the gift. Gift Aid itself does not apply to these, but the relief can be worth more.
What Gift Aid cannot be used for
- donations where you receive significant benefits in return, beyond small token benefits within HMRC limits
- payments for goods or services, such as raffle tickets or event tickets
- donations made on behalf of someone else, or with money from a company (companies get Corporation Tax relief on donations instead)
Frequently asked questions
How much does Gift Aid add to my donation?
25%. A £100 donation is worth £125 to the charity.
Can I use Gift Aid if I do not pay tax?
You should not. You must have paid enough Income Tax or Capital Gains Tax in the year to cover what the charities reclaim.
How do higher rate taxpayers claim Gift Aid relief?
Enter your total Gift Aid donations on your Self Assessment return, or ask HMRC to adjust your tax code. You get back the difference between your rate and 20% on the gross donation.
Can I claim Gift Aid relief for last year’s donations?
Yes, if you file Self Assessment, you can elect to treat donations as made in the previous tax year by including them on that year’s return before 31 January.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.