This is a freeview 'At a glance' guide to Gift Aid and the savings rate band. 

  • Those on lower incomes should be careful about signing Gift Aid declarations now that there is a 0% savings rate of Income Tax.
  • From 6 April 2015 the starting rate of Income Tax is 0% for the first £5,000 of savings provided that your combined savings and non-savings income is £17,570 or less for 2021-22 (£17,500 for 2020-21).
  • If you have, for example, £5,000 of gross savings income, and £12,570 of employment income, you have no tax to pay if you have a full personal allowance of £12,570 in the 2021-22 tax year.
  • If you had the income above and made a Gift Aid donation, HMRC may write to you to recover the tax reclaimed by the charity on your donation.
    • If £1,000 were donated under Gift Aid, the charity would recover £250 (£1,000 x 20/80). The donee must pay sufficient Income Tax in the year to cover this reclaimed amount.  

Useful guides on this topic

Savings income: tax on interest
What is savings income? How is savings income taxed? What allowances are available? 

Tax-free savings income
What types of savings income can be received tax free? What are the limits? 

Savings income: rates and allowances
How do you tax interest? What is the Savings tax allowance?

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