Gift Aid is the government scheme which allows charities to reclaim the basic rate tax you have already paid on any donation.
All you have to do is complete a declaration saying that you pay enough tax to cover what the charity will reclaim from HM Revenue & Customs (HMRC).
If you are a UK taxpayer Haileybury could claim an additional 25p for every £1 you donate at no additional cost to yourself. In order for your gift to qualify for Gift Aid you will need to be a UK taxpayer and pay at least a sum of UK income or capital gains tax equal to that which all the charities or community amateur sports clubs (CASCs) that you donate to will reclaim on your gifts for that tax year.
You don’t necessarily have to be working to be paying tax. Apart from tax on income from a job or self-employment, the tax you’ve paid could include:
- Tax deducted at source from savings interest
- Tax on State Pension and/or other pensions
- Tax on investment or rental income (including tax credits on UK dividends)
- Capital Gains Tax on gains
Other taxes such as VAT and Council Tax do not qualify, nor does any non-UK tax.
Click here to see what a difference Gift Aid makes. For example, if your gift to Haileybury is £10 a month, Haileybury can claim £2.50 of Gift Aid. This means the actual value of the gift to the school is £12.50.
If you pay tax at the higher or additional rate, you can claim the difference between the rate you pay and the basic rate on your donation. You can do this either through your Self-Assessment tax return or by asking HMRC to amend your tax code.
We appreciate that tax has its complexities and can be difficult to understand. For full HMRC details of the Gift Aid scheme please see their website.