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The Value of Gift Aid

The Scottish Community Foundation can increase the value of your donation by 28.2% through the gift aid scheme and hence the amount available to fund good causes. Higher rate taxpayers are also entitled to tax relief (see below).  To qualify donors must pay an amount of income tax and/or capital gains tax at least equal to the tax that the Foundation reclaims on your donation in the tax year (currently 28p for every £1 you give).

Who can make a Gift Aid declaration?
From April 2000, the following will qualify:

  • donations by individuals who are resident in the UK
  • donations by individuals who are Crown servants or members of the UK armed forces serving overseas
  • donations by other non-resident individuals, provided they have income or capital gains charged to UK tax at least equal to the gross amount of the donation (i.e. the donation before deduction of basic rate income tax).

How Does Gift Aid Work?

When an individual taxpayer makes a Gift Aid donation to charity it is treated as paid after deduction of income tax at the basic rate. For example, if he/she gives £100, it is treated as a gross donation of £128.20 from which tax @22%, £28.20, has been deducted. The donor makes a Gift Aid declaration to the charity. The charity can then claim the tax treated as deducted, from the Inland Revenue (so gets £128.20 in total). A higher rate Taxpayer is entitled to further tax relief at the difference between higher and basic rate tax on the gross donation, £128.20 @18% (£23.08). He/she claims this by entering the donation on their Self Assessment tax return.

What a Gift Aid declaration must contain

All Gift Aid declarations must contain:

  • the donor's name
  • the donor's home address including postcode
  • a declaration that the donations are to be treated as Gift Aid donations

 

 
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