Tick one box and your £100 donation becomes £125 to the charity, at no extra cost to you. Here is how Gift Aid works and the extra relief higher earners can reclaim.
Gift Aid is one of the simplest pieces of tax relief in the UK: tick a box, and the charity you support gets 25% more, funded by HMRC rather than your pocket. For higher earners there is an extra layer of relief that goes back to you personally. Yet many donors either forget to claim it or, occasionally, claim it when they should not.
When you make a donation, you give it out of income you have already paid tax on. Gift Aid lets the charity reclaim that basic-rate tax. The maths works because your donation is treated as the net of a larger gross amount that was taxed at 20%.
If you donate £100, that is treated as 80% of a £125 gross donation. The 20% tax on £125 is £25, which the charity reclaims from HMRC. So your £100 turns into £125 for the cause, the extra £25 being the basic-rate tax refunded.
The charity only ever reclaims the basic 20% rate. But if you pay tax at a higher rate, you have effectively overpaid, and you can claim the difference back yourself.
You make this claim through your Self Assessment return or by telling HMRC. See higher-rate tax for how the bands work.
Aisha is a higher-rate taxpayer (40%) and donates £400 to charity during 2025/26, ticking the Gift Aid box.
Step 1 — the charity's reclaim. Her £400 is the net of a £500 gross donation (£400 ÷ 0.80). The charity reclaims 20% of £500 = £100 from HMRC. The charity now has £500.
Step 2 — Aisha's personal relief. As a 40% taxpayer she can claim the difference between 40% and 20% on the £500 gross donation: 20% × £500 = £100, claimed back through Self Assessment.
| Who benefits | Amount | How |
|---|---|---|
| The charity receives | £500 | £400 gift + £100 Gift Aid |
| Aisha gets back | £100 | Higher-rate relief via Self Assessment |
| Aisha's true cost | £300 | £400 − £100 relief |
So a £500 benefit to the charity costs Aisha just £300. Run your income through the salary calculator to confirm your marginal rate first.
There is one important catch. You can only Gift Aid donations if you have paid at least as much income tax or capital gains tax in the tax year as all the charities will reclaim on your gifts. If you donate £400 with Gift Aid, charities reclaim £100, so you must have paid at least £100 in tax that year.
If you have not, perhaps your income is below the £12,570 Personal Allowance, HMRC can ask you to repay the shortfall. This is why non-taxpayers and many low-income pensioners should leave the Gift Aid box unticked. Gift Aid can also be applied to charity shop sales of your donated goods and to some membership subscriptions, but the same tax-paid rule always applies.
Gift Aid is the closest thing to free money in the tax system, but only if you have paid the tax it reclaims. Tick the box as a taxpayer; leave it blank if you are not.
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