G is for Gift Aid

G is for Gift Aid

G is for Gift Aid - A to Z Accountancy Top Tips

If you are a higher rate taxpayer then there are various tax reliefs you may be entitled to. 

If you make charitable donations with Gift Aid, then you may be able to reduce your tax bill! 

What is Gift Aid?

Gift Aid is a scheme that if UK taxpayers donate to charity, the charity can claim back the basic rate tax you’ve paid on that donation directly from HMRC, uplifting what you have donated without costing you! 

The charity can claim 20% but if you are a higher rate taxpayer you will have paid 40% tax! HMRC allows you to claim back the difference on what the charity claimed back, and you paid.

For example

If you donate £1,000 to charity, HMRC treats it as £1,250 before 20% tax under the gift aid scheme. The charity can claim the £250 tax element from HMRC. As a higher rate taxpayer, you paid £500 and therefore you get relief of £250. 


You must have completed a Gift Aid declaration form for the donation. Either at the start of the direct debit or at the point of the donation. 

If you pay through a payroll donation scheme at work and the donation is normally taken pre-tax and there you can’t claim.

The donation goes on the Gift Aid part of the tax return. 

If you have missed this claim in previous years you can claim up to 4 years worth by writing to HMRC for overpayment relief. 

Thank you for reading this weeks blog – G is for Gift Aid, see you next week.


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