Gift Aid is a generous UK Government scheme enabling charities to reclaim tax paid on donations. Personal taxes such as income tax paid on earnings and savings or capital gains tax all qualify for Gift Aid. Other types of taxes such as VAT and council tax do not.
Charities in general under use Gift Aid, although some sectors are very well organised with it, particularly large charities and churches.
Research by the Institute of Fundraising a few years ago suggested that up to £740 million was left on the chancellor’s table annually by charities which could potentially have claimed.
Gift Aid is a straightforward scheme which is easy to administer once the basic principles have been grasped.