Gift Aid is tax relief for single cash gifts made to charities by UK residents (individuals).
Cash gifts include payments made by cheque, bank transfer or credit card.
When you tick the Gift Aid box, your donation can be worth 25p more per £1 donated. There is no cost to you. If you are a higher rate taxpayer, you can claim the difference between the rate you pay and the basic rate on your donation through your Self Assessment return or by asking HMRC to amend your tax code.
More about Gift Aid
Getting tax relief sooner:
In your Self Assessment tax return, you normally only report donations from the previous tax year. But for Gift Aid, you can also claim tax relief on donations you make in the current tax year (up to the date you send your return) if you either:
Want tax relief sooner
Won't pay higher rate tax in the current year, but you did in the previous year
The gift must have no strings attached, and there must be no significant benefits received by you or anyone connected with you in return for the gift.
If you complete your own tax return remember to keep a note of gift aided donations and declare the net amount on your tax return (the net amount is the actual value of the donation made to the charity).
If you use an accountant for your tax affairs make sure you pass on information about gift aided donations. Some accountants don't remind people about this.
Consider what you would like to happen to the extra tax relief you receive. Let's assume you have made a donation of £1,000 and have made a gift aid declaration. BFHU claims £250 from the government, making the grossed-up value of the donation £1,250. If you are a higher rate tax payer and pay 40% tax you can claim 20% (40%-20%) of the grossed-up value of £1,250 as higher rate relief - a possible tax saving of £250.
You can use the relief that you eventually receive to reduce the cost of the donation and in this case the cost to you would be £750.