Many people give to charity during their lifetime, as well as including bequests in their wills. If you are a UK taxpayer, you can donate through the Gift Aid scheme, and may be eligible for tax relief.<\/p>\n
For charities, Gift Aid increases the charity\u2019s donation by 25%, allowing the charity to reclaim the basic rate of tax on your gift at no extra cost to you. Provided you make a Gift Aid Declaration, this happens automatically.<\/p>\n
For example, if you give \u00a380, which is known as the net donation, the charity receives \u00a3100, ie the gross donation. This is the same as you making a payment of \u00a3100 from your pre-tax earnings, assuming you pay tax at the basic rate of 20%. If you pay income tax at the basic rate, there is no further tax relief available to you.<\/p>\n
If you are on a higher or additional rate you can claim further tax relief. This works by extending your basic and higher rate bands by the gross donation. Your relief will be equal to the difference between the basic rate, and either the higher rate of 40% or the additional rate of 45%, depending on the rate of tax you pay.<\/p>\n
For a higher rate tax payer (40%), a further 20% of tax can be claimed on the gross donation, i.e. a further \u00a320. For an additional rate payer (45%), an extra 25% can be claimed, being a further \u00a325.<\/p>\n
Here\u2019s an example:<\/strong><\/p>\n You are a higher rate taxpayer paying with earnings of \u00a375,000 and you give an \u00a380 donation to a relevant charity, and make a gift aid declaration. The example uses the tax rates for England and Wales; different tax bands apply in Scotland.<\/p>\n The charity automatically claims 25% of \u00a380 = \u00a320 from HMRC. The charity has received \u00a3100 (the gross donation).<\/p>\n You declare the \u00a3100 gross payment on your tax return and extend your basic rate band by the gross payment (the higher rate band would also be extended where the individual earns over the additional rate threshold of \u00a3125,140).<\/p>\n\n\n
\n 2026\/27 bands<\/strong><\/td>\n<\/tr>\n \n Basic rate band<\/td>\n \u00a337,700<\/td>\n<\/tr>\n \n Higher rate band<\/td>\n \u00a3125,140<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\n
\n 2026\/27 bands after extension<\/strong><\/td>\n<\/tr>\n \n Basic rate band<\/td>\n \u00a337,800<\/td>\n<\/tr>\n \n Higher rate band<\/td>\n \u00a3125,140<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\n
\n Tax on your \u00a375,000 salary, ignoring any donation<\/strong><\/td>\n<\/tr>\n \n Personal allowance<\/td>\n \u00a312,570<\/td>\n \u00a3-<\/td>\n<\/tr>\n \n Basic rate<\/td>\n \u00a337,700 x 20%<\/td>\n \u00a37,540<\/td>\n<\/tr>\n \n Higher rate<\/td>\n (\u00a375,000 – \u00a337,700 – \u00a312,570) x 40%<\/td>\n \u00a39,892<\/td>\n<\/tr>\n \n Total tax<\/td>\n <\/td>\n \u00a317,432<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n