Through Gift Aid, we are able to reclaim tax paid by a donor on their gift, as long as they are a UK tax payer and have paid sufficient tax in the current tax year.
This means that for every £1 you donate to the Hospice using Gift Aid, we can claim an additional 25 pence from HM Revenue & Customs (HMRC). In addition HMRC will automatically pay the charity a further 3 pence for every £1 of Gift Aided donation it receives between 6 April 2008 and 5 April 2011; this transitional relief has been provided by Government to allow charities to adjust to the fall in basic rate tax (from 22% to 20%) from 6 April 2008. This means that for every pound donated under the Gift Aid scheme the charity will continue to receive 28 pence.
Gift Aid can apply to one-off donations, to a series of regular donations, or to any donations made in the last 6 years.
Higher rate taxpayers who make donations through Gift Aid can claim back the difference between the higher rate of tax at 40 per cent and the basic rate of tax at 20 per cent on the total value to the charity. Some donors choose to pass on this extra reclaimed tax either direct to the charity or through their Self Assessment Tax Return.
If you do not pay tax, you should not use Gift Aid.