As the 2025/26 tax year begins on 6 April 2025, UK taxpayers can combine giving with smart tax planning. With frozen thresholds and rising costs, every pound matters. Gift Aid helps you donate while saving tax, boosting your impact.
What Is Gift Aid, and How Does It Work?
Gift Aid is HMRC’s scheme for UK-registered charities and CASCs. When you opt in, charities reclaim 20% tax you’ve already paid, adding 25p for every £1 donated.
Example: A £100 donation becomes £125 for the charity at no extra cost to you. This applies to cash gifts, standing orders, or charity event fees, as long as you pay UK tax.
Tax Benefits of Gift Aid
For basic-rate taxpayers, Gift Aid boosts donations by 25%. Higher-rate taxpayers (40% or 45%) can claim extra relief via Self Assessment.
Example: A £1,000 donation gives the charity £1,250. A 40% taxpayer reclaims £200, so the net cost is £800. For 45% of taxpayers, the net cost drops to £550.
Gift Aid also helps preserve allowances, reduce child benefit charges, and lower taxable income.
Tips to Claim Gift Aid in 2025/26
- Track donations: Keep records for six years.
- One declaration: Covers multiple charities.
- Sponsored events: Qualify if Gift Aid is declared.
- Avoid pitfalls: Exclude non-UK charities and skip if receiving benefits.
- Payroll giving: Offers up to 45% relief pre-tax.
Donations made after 6 April 2025 count for the 2025/26 tax year. Claim via Self Assessment or HMRC forms.
Why Gift Aid Matters in 2025/26
With inflation and funding challenges, Gift Aid adds over £1.3 billion yearly to UK charities. Opting in means your donation goes further while reducing your tax bill.
Start small—tick the Gift Aid box next time you donate. Every pound counts for both you and the charity.
FAQs
Q1: Who qualifies for Gift Aid in the UK?
Anyone paying UK income tax or capital gains tax can opt in.
Q2: How much extra does Gift Aid add to donations?
Charities receive 25% more—£100 becomes £125.
Q3: Can higher-rate taxpayers claim extra relief?
Yes, they can reclaim the difference via Self Assessment.
Q4: Does Gift Aid apply to non-UK charities?
No, only UK-registered charities and CASCs qualify.
Q5: What is payroll giving?
A scheme allowing donations directly from salary before tax, saving up to 45%.
