What is Gift Aid?
Gift Aid is a scheme from HM Revenue & Customs that allows us to reclaim an extra 25% on your donations made during the past 4 years, as well as on all future donations, without costing you a penny. This means that for every £1 you donate, Esharelife gets an extra 25p.
While that might not sound like a lot, if we applied Gift Aid to every donation made to Esharelife in 2022, we would have raised an additional £24,606! That’s enough to increase our grant donations by almost 40% at absolutely no additional cost to you or Esharelife!
Am I eligible for Gift Aid?
To be eligible for claiming Gift Aid on charity donations, you must be a UK taxpayer and pay an amount of income and/or capital gains tax – at least equal to the tax that all charities and Community Amateur Sports Clubs will reclaim in the tax year of your donation. This also applies if you pay tax on your savings, pension plan or investment income, but taxes such as VAT and Council Tax do not qualify.
Your donations will qualify as long as they’re not more than 4 times what you have paid in tax in that tax year (6 April to 5 April). If the charity gets back more tax than you’ve paid in Income Tax and/or Capital Gains Tax, HMRC may ask you to pay more tax to cover the difference.
For the full details regarding the Gift Aid scheme, please consult HMRC’s website.
What do I get out of it?
Donors do not directly receive anything, although all donations made with Gift Aid are tax-deductible and treated as having the value of the original donation plus what the charity reclaims from it.
For example, if you were to donate £100 with Gift Aid, it would count as a grossed-up donation payment of £125, which can be deducted from your taxable income.
Additionally, if you are a higher-rate taxpayer, you are able to reclaim tax on the amount you have donated. Esharelife can claim the basic rate of tax on the value of your gift, and you can reclaim the difference between a higher rate (40%) and a basic rate tax (20%).
For example, if you give £100 to the RNLI, we can reclaim Gift Aid of £25, making your total gross donation £125. Being a higher-rate taxpayer, you pay 40% tax, so you can personally claim back a further 20% on the total gross donation (the difference between the two tax bands). In this example, you can claim back £25 (20% of £125). This means your £125 gift to the RNLI would have only cost you £75.