Gift aid is an optional add-on that’s often offered alongside donations, or available as Gift Aid in charity shop purchases, but a lot of us don’t know the details of what it actually does.
Gift Aid is a UK scheme that lets registered charities claim an extra 25p for every £1 donated, at no extra cost to you, the donator/supporter. If you donate £10, for example, the charity can claim an extra £2.50. Donate £100, and that gift becomes £125. It’s a nice little boost for doing exactly the same good thing.
How does that happen? Essentially, when you opt in to Gift Aid, the charity is able to claim back the basic 20% rate of tax that you’ve already paid, and that reclaimed tax is what tops up your donation.
For Walk the Walk, that means your donation goes further in supporting people living with and affected by cancer, raising awareness, and funding vital work that helps more people get the support they need. All you usually need to do to make that happen is tick the box!
Who can use Gift Aid?
To use Gift Aid, the only qualifications are that you need to be a UK taxpayer, and you need to have paid enough Income Tax and/or Capital Gains Tax in that tax year to cover the amount that the charity will reclaim. The HMRC explains this as your donations being no more than four times the tax you’ve paid in that year.
You’ll also need to make a Gift Aid declaration, which tells the charity that you’d like them to claim on your donation. Your home address is part of that process, because it helps confirm you as a current UK taxpayer. If you’re sponsoring someone, it’s worth noting that workplace addresses are not valid for this.
There are a couple of important limits to Gift Aid, too. For example, you can’t Gift Aid money collected from other people and pay it in as if it were your own donation. As well as this, if the donation is made in return for something like a raffle entry, auction item or ticket, that doesn’t count as a straightforward Gift Aid donation either.
How to add Gift Aid to your donation
Adding Gift Aid to your Walk the Walk donation is incredibly simple. When you make a donation, the first thing you’ll be asked is how much you want to donate. After selecting this, you’ll be presented with a question that asks if you’d like to add Gift Aid to your donation. All you have to do is tick the box that states ‘Yes, I want to add Gift Aid’, and you’re set!
What does the Gift Aid maths look like?
This is the bit many people overthink, but it’s actually very simple. The additional Gift Aid amount is always 20%, so the more you donate, the more Gift Aid can be claimed on top. For the most commonly donated amounts, this means that:
- £1 becomes £1.25
- £10 becomes £12.50
- £50 becomes £62.50
- £100 becomes £125
This is why Gift Aid matters so much; a quick tick can make a really meaningful difference, especially when everyone opts in. Across lots of donations, this amount can add up fast.
What if I’m a higher-rate taxpayer?
If you’re a higher-rate taxpayer, Gift Aid can actually do a little more for you personally, too.
The charity still claims the basic rate element and receives the 20% top-up on your donation. But if you pay tax at a higher rate, you may be able to claim back the difference between your rate and the basic rate through your Self Assessment tax return, or by asking HMRC to amend your tax code.
For example, if you donate £100, the charity can claim Gift Aid and turn that into £125. If you pay tax at 40%, you can personally claim back £25.
When can’t you use Gift Aid?
One of the most common points of confusion around Gift Aid is when it comes to Payroll Giving. This is when your donation comes straight from your wages or pension before tax is deducted.
Because the tax relief has already been applied in this way, these donations are not eligible for Gift Aid as well. You can take the tax deduction through one route or the other, but not both.
The rules are the same across all eligible charities. If you’re donating to a cancer charity, what matters is whether the donation qualifies, whether you’ve paid enough tax, and whether you’ve completed the declaration correctly. If you’re donating online, this really is as simple as ticking a box.
A small tick that makes a big difference
So what is Gift Aid, really? It’s one of the easiest ways to make a donation go further.
It costs you nothing extra, and can turn your donation into something even more powerful. For more information about how Gift Aid can enhance your donation, have a look at our Gift Aid FAQs.
If you’re donating to Walk the Walk or sponsoring a Walker, it’s always worth checking whether you’re eligible before you hit donate. Your gift could go even further than you think.