What is Gift Aid?

Gift Aid is a UK government scheme that allows charities and community amateur sports clubs (CASCs) to reclaim the basic-rate income tax already paid by a donor on a gift. For every £1 donated by a UK taxpayer, the charity can claim an additional 25p from HMRC — boosting the value of the donation by 25% at no extra cost to the donor.

TL;DR: Gift Aid turns a £10 donation into £12.50 for the charity. Donors must be UK taxpayers and must sign a Gift Aid declaration. Charities claim the relief directly from HMRC, typically online. In the tax year to April 2025, HMRC paid £1.7 billion in Gift Aid to charities and CASCs — a 7% increase on the previous year.

How Gift Aid Works

Gift Aid works because of how basic-rate income tax is treated in the UK. When a UK taxpayer earns income, they pay 20% income tax on it before it reaches their bank account. When they make a charitable donation from that net income, the gift effectively contains tax that has already been deducted. Gift Aid allows the charity to reclaim that tax directly from HMRC.

The arithmetic is straightforward. A donation of £10 is treated as if the donor had donated a gross sum from which 20% tax had already been deducted. The gross equivalent of £10 is £12.50 (because £12.50 × 80% = £10). HMRC then pays the charity the £2.50 difference — equal to 25p for every £1 of the net donation received.

From the donor's perspective, nothing changes. They donate £10 and £10 leaves their bank account. From the charity's perspective, a signed declaration unlocks an additional £2.50 from HMRC. No additional paperwork is required of the donor beyond the initial declaration.

Higher-rate and additional-rate taxpayers can personally reclaim additional relief. A donor paying the 40% rate can claim back the difference between higher-rate and basic-rate tax (20%) on the gross donation — either via their Self Assessment tax return or by contacting HMRC directly. The charity still only receives the basic-rate top-up; the additional relief goes to the donor. In the tax year to April 2025, higher-rate tax relief on Gift Aid donations totalled £820 million, up 8% on the previous year. (Source: HMRC Charity Tax Relief Statistics, June 2025)

Eligibility and Gift Aid Declarations

Who can give with Gift Aid?

For a charity to claim Gift Aid on a donation, the donor must:

1. Be an individual — Gift Aid cannot be claimed on donations made by companies, grant-making trusts, or other organisations.
2. Be a UK taxpayer — the donor must pay UK Income Tax or Capital Gains Tax in the tax year in which the donation is made.
3. Have paid enough tax to cover the claim — the donor's total tax liability for the year must be at least equal to the amount of Gift Aid that will be reclaimed on all their Gift Aid donations in that year. If a donor has over-estimated their tax payments, they are personally responsible for making up any shortfall to HMRC.
4. Give their own money — the donation must come from the donor's own funds. Donations made on behalf of a group, or collected from third parties, are not eligible.

What counts as a qualifying donation? Cash, cheques, direct debits, standing orders, and online card payments all qualify, provided the other criteria are met. Donations of goods, time, or services do not qualify for Gift Aid. Charity shop sales and lottery ticket purchases also fall outside the scheme.

Gift Aid declarations

Before a charity can claim Gift Aid on a donation, it must hold a valid Gift Aid declaration from the donor. A declaration is a statement by the donor confirming that they are a UK taxpayer and that they want the charity to claim Gift Aid on their donations.

Declarations can be given in writing, verbally (over the telephone, provided the charity keeps an adequate record), or online. They can cover a single donation, all past donations, all future donations, or all past and future donations — the donor specifies the scope.

The declaration must include the donor's full name, home address, and a statement that the donor is a UK taxpayer. HMRC does not prescribe a fixed form of words, but charities must retain clear records. Declarations remain valid until the donor withdraws them, and donors should be reminded to cancel a declaration if their tax status changes.

Gift Aid and the charity sector at scale. HMRC paid £1.7 billion in Gift Aid to charities and CASCs in the tax year to April 2025 — representing one of the largest sources of tax-advantaged income available to the voluntary sector. (Source: HMRC Charity Tax Relief Statistics, June 2025)

The Gift Aid Small Donations Scheme (GASDS)

What GASDS is for

The Gift Aid Small Donations Scheme (GASDS) was introduced in 2013 to address a practical limitation of standard Gift Aid: small, anonymous cash donations — the kind dropped in a collection tin or given at a church door — cannot realistically be accompanied by a signed declaration. GASDS allows charities to claim a Gift Aid-equivalent top-up on small donations without needing individual declarations.

How GASDS works

Under GASDS, charities can claim a top-up payment of 25p for every £1 of eligible small donations. Eligible donations are cash or contactless card payments of £30 or less per donor per donation. The scheme extends to contactless payments, recognising how donation behaviour has shifted.

The total small donations on which a charity can claim GASDS top-up payments is capped at £8,000 per tax year (rising to a further £8,000 per community building for charities that run charitable activities in community buildings). The maximum top-up payment is therefore £2,000 per year under the standard cap.

GASDS also applies a matching rule: a charity must claim Gift Aid on at least 10% of the value of the small donations it is claiming through GASDS in the same tax year. A charity that has claimed no Gift Aid at all cannot use GASDS. This requirement links the scheme to active donor engagement rather than treating it as a standalone windfall.

Eligibility for GASDS

To use GASDS, a charity must:

• Be recognised by HMRC as a charity for tax purposes.
• Have been registered with HMRC for at least two complete tax years (though some new charities may still qualify; see HMRC guidance).
• Not have had a penalty for a Gift Aid or GASDS claim in the current or preceding tax year.
• Satisfy the Gift Aid matching rule in the relevant tax year.

Claims must be submitted within two years of the end of the tax year in which the donations were received. (Source: HMRC, Chapter 8: The Gift Aid Small Donations Scheme)

How Charities Claim Gift Aid from HMRC

Charities claim Gift Aid through HMRC's Charities Online service. The process has three stages:

1. HMRC recognition. Before a charity can claim Gift Aid, it must be formally recognised by HMRC as a charity for tax purposes. This is separate from Charity Commission registration. Charities apply using form ChA1 (or the equivalent online application). HMRC recognition can take several weeks to obtain for new charities.

2. Registration for Charities Online. Once recognised, the charity registers for HMRC's online services and enrols for the Charities Online system. An activation code is sent by post and must be used within 28 days.

3. Submitting claims. The charity submits claims via Charities Online, providing a schedule of donations on which Gift Aid is being claimed. The schedule includes each donor's name, address, donation date, and donation amount. HMRC processes online claims and typically makes payment within 25 working days. Charities unable to use the online service can submit paper claims using the ChR1 form, though processing takes longer.

Claims can be submitted as frequently as the charity chooses — many larger charities claim quarterly or monthly to maintain cash flow. The deadline for submitting a Gift Aid claim is four years from the end of the tax year in which the donation was received. (Source: GOV.UK, Claim Gift Aid online)

FAQs

Can a charity claim Gift Aid if the donor is not sure whether they pay enough tax?

The responsibility for ensuring sufficient tax has been paid lies with the donor, not the charity. A charity that collects a valid declaration in good faith and submits a claim to HMRC is protected even if the donor later turns out to have been ineligible. However, charities should make it clear to donors — ideally in the declaration itself — that donors must notify the charity if their tax status changes. HMRC may seek to recover unpaid tax from the donor directly.

Does Gift Aid apply to membership subscriptions?

It depends. Membership subscriptions can qualify for Gift Aid, but only if the benefits received by the member in return are below certain thresholds (broadly, the benefit must not exceed £2.50 per £1 donated, up to a limit). Where a subscription is primarily a commercial transaction — granting access to facilities or services at fair market value — Gift Aid cannot be claimed on it. Charities with significant membership income should take professional advice on where Gift Aid applies.

Can a charity claim Gift Aid on a donation made through a payroll giving scheme?

No. Payroll giving (also called Give As You Earn) works differently from Gift Aid. Donations are made before income tax is deducted, so the tax relief is given at source through the payroll. Claiming Gift Aid on top of a payroll gift would result in double tax relief on the same donation, which HMRC does not allow.

Recommended Next Pages

• What is Restricted vs Unrestricted Funding? — Understanding how donor intent shapes what a charity can do with its income.

• What is Fundraising for Charities? — A broader look at the income generation landscape for the voluntary sector.

• What is a Charity Trustee? — Trustees are ultimately responsible for ensuring their charity complies with Gift Aid rules. This guide covers their full legal duties.

Published by the Plinth Team. Last updated 21 February 2026.