How does Gift Aid work in the UK?

The charity gets 25p extra for every £1 you give, if you pay enough UK tax and make a Gift Aid declaration.

You gave to a charity in the UK and someone mentioned Gift Aid. Here is what it is, in plain words.

The short rules

The charity gets 25p extra per £1 you give, if you pay enough UK tax and make a Gift Aid declaration.

The charity gets 25p extra for every £1 you give, claimed back from the tax you have paid. It costs you nothing more.
You must pay enough tax. You need to pay at least as much UK Income Tax and/or Capital Gains Tax in that tax year as all the charities you give to will claim.
You make a Gift Aid declaration. It says the charity's name, your full name and home address, whether it covers one gift or past, present and future gifts, and that you want Gift Aid to apply.
It can reach back four years for gifts you already made.

Example: you give £20 and make a declaration. The charity can claim £5 extra, so your gift is worth £25 to them.

The amounts in this example are invented.

If you pay higher-rate tax

Higher-rate taxpayers can claim the difference between the basic rate (20%) and their own rate through Self Assessment.

Not a UK taxpayer?

Then you cannot make a valid Gift Aid declaration. Companies cannot use it either. The charity can still accept your gift without Gift Aid.

In WeGlow

On the donation page of a UK organisation, donors can tick a Gift Aid box to boost their gift by 25% at no extra cost. By ticking it they confirm they are a UK taxpayer and that the organisation may reclaim tax on gifts from the past four years and future gifts. The organisation can export the Gift Aid details as a CSV file for its claim. The organisation makes the claim, not WeGlow.

How sure are we?

The rules come from the UK government's own pages (gov.uk), which do not state a tax year, so treat them as current and check before you rely on them. Where exactly you tick which box on your tax return is not covered here. We do not give personal tax advice.

What is Gift Aid?

Gift Aid lets a UK charity claim an extra 25p for every £1 you give. It costs you nothing more. You must be a UK taxpayer and give each charity a signed Gift Aid declaration (gov.uk).

How much tax do I need to pay to use Gift Aid?

You need to pay at least as much UK Income Tax or Capital Gains Tax in that tax year as all the charities you give to will claim. Put another way, your gifts must not exceed four times the tax you paid. On £100 the charity claims £25 (gov.uk).

Can I apply Gift Aid to gifts I already made?

Yes. One declaration can include gifts from the previous four years, so the charity can claim Gift Aid on those too. You can make the declaration cover past, present and future gifts, or just a single gift.

What do I get back if I pay higher-rate tax?

If you pay tax above the basic rate of 20%, you can claim the difference between the basic rate and your own rate through Self Assessment. gov.uk gives an example: on a £100 gift the charity claims £25 and a 40% taxpayer recovers a further £25.

Sources

Gift Aid (gov.uk): 25p per £1, the tax you must pay, the declaration, four-year backdating, higher-rate relief
Gift Aid declarations (gov.uk): what a declaration must contain
What donations charities can claim Gift Aid on (gov.uk): individuals only, not companies
Claim Gift Aid (gov.uk): charities can claim back 25p per £1