able to reclaim the tax that should have been paid on the gift. Gift Aid can only be reclaimed on money donated by UK taxpayers. Non-UK taxpayers can make donations. However, as HMRC is making payment to the charity but there has been no source tax paid by the donor, HMRC has power to collect the equivalent sum from the donor. The first charity to introduce Gift Aid on donated goods – where the tax is reclaimed on the value of the goods when sold – was Sue Ryder Care. Gift Aid is only for donations by the donor. It cannot be claimed on other people's donations – for example, if someone collects money from several people, each person would have to make a Gift Aid declaration for their portion. It also cannot be claimed for money where the donor received something in return, e.g. purchasing goods from a charity store, or buying a ticket in a charity raffle, as these are not strictly donations. In the case of donated goods, Gift Aid can still be claimed via the donor of the goods, not the purchaser. A practical example Mr Burns donates £100 to charity. Mr Burns is a higher-rate taxpayer, paying 40% income tax on part of his income. He has made a Gift Aid declaration to the charity. As a result: the £100.00 gift is treated as being made after deduction of basic rate tax at 20%. The gross value of the gift before tax is £125 (£100 / (100%-20%)) – this is the amount of money a basic rate taxpayer would need to earn to receive £100.00 after tax. the charity can claim the 20% of basic rate tax (£125 × 20% = £25) that the taxpayer is treated as having paid on the gross value of the gift. This is effectively an extra 25% on top of the value of the £100.00 donation. because he is a higher-rate taxpayer, Mr Burns can claim back the remaining 20% of income tax which he has paid on the gross value of the gift (the 40% income tax which he paid, less the 20% claimed by the charity). He would make this claim in his tax return. This amounts to a repayment of £25 on the £100 donation (£125 × (40% - 20%)). The benefits to the charity For 2008-11 (when the basic rate of income tax was higher