What is Gift Aid?

When you make a Gift Aid donation, the charity can reclaim 25p for every £1 you give. So a £100 donation becomes worth £125 to the charity — with the extra £25 coming from HMRC, not from you.

This works because Gift Aid treats your donation as if you made it from income on which you've already paid 20% basic-rate tax. HMRC repays that tax directly to the charity. The scheme applies to gifts to UK charities and Community Amateur Sports Clubs (CASCs).

To make a Gift Aid declaration you must:

• Be a UK taxpayer (income tax or capital gains tax).
• Have paid at least as much tax in the year as the charities will reclaim across all your donations. For example, if you donate £100, the charity reclaims £25 — so you must have paid at least £25 in tax that year. (VAT and Council Tax don't count.)

You declare Gift Aid by signing a Gift Aid declaration — usually a tick box on the charity's donation form or a standing declaration covering all your gifts to that charity.

The "enough tax" rule matters.If you haven't paid enough Income Tax or Capital Gains Tax to cover what the charities reclaim, you— not the charity — may have to pay the difference to HMRC. Non-taxpayers, and anyone whose giving is large relative to the tax they pay, generally shouldn't make Gift Aid declarations on the excess. A drop in income or retirement can tip you below the threshold, so it's worth reviewing periodically.

If you pay income tax at 40% (higher rate) or 45% (additional rate), you can personally reclaim the difference between your tax rate and the basic rate on the grossed-up donation. You do this through your self-assessment tax return.

For example, a 40% taxpayer donating £100 with Gift Aid:

• Charity receives: £125 (£100 + £25 from HMRC)
• You can personally reclaim: approximately £25 (the 20% difference on the £125 grossed-up amount)

A note on where you live. The 20% / 40% / 45% rates above apply to taxpayers in England, Wales and Northern Ireland. Charities always reclaim at the UK basic rate (20%) wherever you live, but Scottish taxpayers have their own income tax bands (19%–48%), so the personal relief a Scottish donor can claim is different. Check the rates that apply to you.

Important:The figures above are illustrative. Your actual reclaim depends on your total income and tax position, and HMRC works out the relief from the donation totals you enter — you don't calculate it yourself. Charity Recorder is a record-keeping tool, not a tax adviser — consult a qualified accountant or use HMRC's official tools for accurate calculations.

Higher-rate relief isn't the only reason to keep good Gift Aid records. Because a Gift Aid donation extends your tax bands and reduces your "adjusted net income", it can help in several other ways:

• Tax-band extension. A Gift Aid gift extends your basic-rate (and higher-rate) band by the grossed-up amount, so more of your income is taxed at a lower rate.
• The £100,000 personal-allowance trap. Between £100,000 and £125,140 of income your tax-free personal allowance is gradually withdrawn, creating an effective tax rate of around 60% in that band. Gift Aid can restore some or all of that allowance — so a donation in this band can be worth up to roughly 60% in relief.
• The High Income Child Benefit Charge. The same reduction in adjusted net income can reduce — or remove — the charge that claws back Child Benefit from higher earners.

These are some of the most valuable, and most overlooked, uses of Gift Aid. They're also genuinely complex, so they're exactly the kind of thing to raise with an accountant — armed with a clear record of what you gave.

Gift Aid only applies to gifts of money — cash, card, cheque, direct debit or standing order. A few common things don't qualify:

• Gifts of goods, services, or a loan write-off (donating goods to a charity shop is handled differently).
• Donations where you receive a prize or substantial benefit in return — raffles and prize draws (such as Omaze), and most crowdfunders for individuals.
• Donations made through a limited company (companies get corporation-tax relief instead).
• Gifts to non-UK charities — only UK charities and CASCs qualify (the previous EEA extension ended in April 2024).

Charity Recorder lets you mark any donation as Gift Aid, but whether a gift actually qualifies is your responsibility — if in doubt, check the charity's declaration or ask your accountant.

Gift Aid follows the individual who made the gift — there is no "household" Gift Aid. Each spouse or civil partner is a separate donor, with their own declaration, their own tax to cover it, and their own relief.

A couple can both claim Gift Aid on a joint donation, though — each on their own share. The split should be agreed at the time of giving, and how you allocate it can matter: directing more of a gift to the spouse who is a higher-rate taxpayer, or who is in the £100k or Child Benefit zone, can be worth more than splitting it evenly.

In Charity Recorder, households with two admins (e.g. a couple) can split a donation and record which member claims Gift Aid on each share — so each person's totals are ready for their own return.

On your self-assessment return you can elect to treat a donation as if it were made in the previous tax year — useful if you were a higher-rate taxpayer then but not now, or to bring relief forward. The election has to be made on or before the date you file that prior-year return, and by its filing deadline.

Charity Recorder records each donation under the tax year you actually gave it; a carry-back election is something you make on your return, not in the app.

If you claim relief through self-assessment or a tax-code change, HMRC expects you to keep a record of the date, amount and charity for each Gift Aid gift. In practice that means holding on to:

• Charity receipts, thank-you letters and confirmation emails.
• Bank or card statements showing the payment.
• A copy of each Gift Aid declaration you made — and, for joint gifts, the agreed split.

How long?HMRC's stated minimum for individuals is at least 22 months after the end of the relevant tax year. If you're self-employed or let property, keep them for at least 5 years after the 31 January filing deadline to be safe. Keeping a clear, lasting record is exactly what Charity Recorder is for.

When you add a donation in Charity Recorder, you can mark it as Gift Aid eligible. This lets you see your Gift Aid total at a glance and include it in your annual summary. The annual tax year detail page also shows an indicative relief calculation — clearly labelled as illustrative, not tax advice.

HMRC's official guidance: Donating to charity through Gift Aid (gov.uk) · Charitable giving tax relief (HS342)

Tax rules and thresholds change. This page is general background, not personal tax advice — always check current HMRC guidance or speak to a qualified accountant.