How Gift Aid Works
The Gift Aid scheme is for gifts of money by individuals who pay UK tax.
Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities or CASCs take your donation - which is money you have already paid tax on - and reclaim the basic rate tax from HMRC. on it's 'gross' equivalent - the amount before basic rate tax was deducted.
Basic rate tax is 20% so this means that if you give £10 and fill in a gift aid form (see attached) it's work £12.50 to the charity. For donations between 6 April 2008 and 5 April 2011 the charity or CASC will also get a separate government supplement of three pence on every pound you give.