What is Gift Aid?
Gift Aid is a government scheme that allows charities to reclaim the tax that you have already paid on your donations through UK Income Tax or Capital Gains Tax. As a UK taxpayer you will pay tax on your earnings, savings or pensions, at either a basic rate of 20% or a higher rate of 40%. If you make a donation to charity, this donation will come from money that you have already paid tax on. As a charity, we can reclaim this tax back, at the basic rate of 25%, from the Government. This means, for example, that if you donate £100 and you tick the Gift Aid box, it becomes worth £125. Your donations will qualify as long as they’re not more than 4 times what you have paid in tax in that tax year (6 April to 5 April). All individual donations (excluding those made through the Charities Aid Foundation, which are already subject to tax relief) are eligible for the scheme – including regular gifts such as Standing Orders and Direct Debits. We can claim Gift Aid on donations made in the last four years and on future donations once we have received your declaration. Gift Aid is a simple way to increase the value of your gift to NYF UK – at no extra cost to you. This additional income really does make a big difference, so please don’t forget to Gift Aid donations if you are a UK tax payer.
How do I know if I am a UK taxpayer?
You are a UK taxpayer if:
- Tax is taken from your wages or pension before you receive them.
- You have to fill in a self-assessment form.
- You have any taxable savings (in a building society, for instance), a pension plan or investment income, or you have recently paid any Capital Gains Tax/expect to pay it in the near future. This could be on the sale of a property or some shares, for example.
- Remember by signing up to Gift Aid, you are confirming that you are an eligible taxpayer who has paid sufficient tax (and that if you haven’t paid enough tax, it’ll be up to you to make up the difference).
What if I pay tax at the higher rate?
We can only claim back tax at the basic rate, but that is still worth 25% extra on your donations to us, so please provide us with a declaration anyway. If you are a higher-rate tax payer you can also claim additional tax relief. For higher rate tax payers (paying tax at 40%) this works out as 25p for every £1 you donate and for the highest rate tax payers (paying tax at 45%) this works out as 31p for every £1 you donate. If you pay higher rate tax, you can claim the difference between the higher rate of tax and the basic rate of tax on the total (gross) value of your donation to NYF UK. You can make this claim on your Self-Assessment Tax Return. We would suggest speaking to your accountant if you would like to do this. The government guidelines relating to tax relief for higher rate tax payers can be found here.
Do I have to make a declaration with every gift?
No. You just need to do it once and it will cover gifts you have already made to NYF UK in the last four years and gifts you make in the future, until you let us know otherwise. If you are donating via an online donation platform (for example Just Giving, Everyday Hero or Wonderful.org) or through our website, you simply need to tick the Gift Aid box when prompted to complete your Gift Aid Declaration. If you wish to donate via other means, please get in touch here and we will send you a hard or electronic copy of the Gift Aid Declaration.
What if I have agreed to Gift Aid to another charity?
You can support as many UK charities as you like through Gift Aid. You just need to return a declaration to each charity that you support and ensure that you are paying enough tax during the year to cover your total annual donations.
The government guidelines regarding Gift Aid can be read in full here.