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Tax help - Pensioners - Non-taxpayers - Gift aid
Tax helpPensioners Search Help
Gift Aid
  • Gift Aid is a way of making a gift to a charity where the charity gets a tax repayment as well as your cash.


  • Gift Aid also applies to gifts made to Community Amateur Sports Clubs (CASC). The relief only applies to gifts made to the CASC and not to any other payments such as membership subscriptions.


  • If you are a non-taxpayer you may give yourself a tax liability if you make a donation under Gift Aid. You can only make a Gift Aid donation if you pay tax at least equal to the 20% the charity will reclaim on your gift.


  • This will also apply if you pay only at the 10% starting rate for savings. Have a look at the link for more details on this.


Paul - Gift Aid payment
Paul aged 74 pays tax at 10%. During 2010/11 he makes a Gift Aid donation to Oxfam of £400. The charity actually receives:

£  
Paul's payment
400
Tax @ 20% (reclaimed by charity)
100
Total gift
£500


So Paul makes a gift of £500 from which tax at 20% is taken off to leave the payment of £400 he actually makes. Paul needs to be sure that he has paid tax himself of at least £100.

  • If Paul pays less tax on his income than the £100 in the example the Revenue can collect the tax on the difference from him. Paul would be able to count as tax paid any tax credits at 10% on any dividends received.


  • If you are submitting a repayment claim, the Revenue will normally take any tax you owe on a Gift Aid payment from the repayment you are due.


  • Sometimes they may ask the charity to make good the tax lost.

  • Incidentally although it does not affect your own tax - for the tax years 2009/10 & 2010/11 - the charity is able to claim an extra 2% of tax back on your Gift Aid payment on top of the 20% mentioned above.

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