Tax relief - Is available at your top tax rate for payments made under the Gift Aid scheme. There is no minimum limit for gift aid payments
and they can be a one off donation or a series of payments. To qualify for relief donors are required to make a declaration.

If a higher rate taxpayer (40%) made a gift aid payment of £1000, the charity would benefit by £1282* and the net cost to the taxpayer would be £750 as relief of £250 could be claimed on the £1000 grossed up payment of £1250.

If an additional rate taxpayer (50%) made a gift aid payment of £1000, the charity would benefit in the same way as above but the net cost to the taxpayer would be £625 as relief of £375 could be claimed on the £1000 grossed up payment of £1250.

*The charity benefits from 22% tax relief claimed back from the government but the individual`s payment is grossed up by 20% in line with basic rate tax. However, from 6th April 2011 charities will only be able to reclaim the 20% actually paid by the taxpayer.

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