Individuals pay different amounts of tax to the government depending on their income. This is called Income Tax Rate and Bands. This effects the Gift Aid you may or may not be eligible for, and the tax benefits you could receive.
Families on lower incomes, such as those that receive free school meals or with an income below £12,500 per year, may not be eligible for Gift Aid.
If you’re a Higher Rate taxpayer with income above £50,001 per year, you can claim the difference back from HMRC.
For example: You donate £100 to charity – they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).
You can claim the difference either:
- through your Self Assessment Tax Return
- by asking HMRC to amend your tax code
