Gift Aid > Other Tax-Efficient Giving > Higher Rate Taxpayers

Higher Rate Taxpayers

The church can only claim back tax under Gift Aid at the basic rate, currently 22%, no matter at what rate the donor pays tax. If the donor pays the higher rate of tax, they can recover the difference in tax directly from the Inland Revenue, usually from their Self Assessment tax return. At the time of writing, the higher rate taxpayer pays tax at 40%, the church reclaims at 22%, and the donor can reclaim the 18% back from the Inland Revenue.

For example, a donation of £78 is worth £100 to the church after recovery of tax at the basic rate. The higher rate tax payer can obtain a further £18 tax back, reducing the cost to them to £60.

While it may be beneficial to offer an explanation of this, as an incentive to higher rate taxpayers to increase their Gift Aided giving accordingly, it would be unwise to assume that any particular individual is necessarily a higher rate tax payer, and has not already taken this personal tax relief into account in deciding how much to give.