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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) for gifts after 6 April 2002. 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 2008/09 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 2008/09 - 2010/11 - the charity will be able to claim an extra 2% of tax back on your Gift Aid payment on top of the 20% mentioned above. This is to compensate them for the drop in the basic rate from 22% in 2007/08 to 20% in 2008/09.
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