Tag: donations

Maximising Gift Aid Donations

Give and Receive Sharing Support Helping Others

The end of the tax year is just a few weeks away.

Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities or CASCs take your donation – which is money you’ve already paid tax on – and reclaim the basic rate tax from HM Revenue & Customs (HMRC) on its ‘gross’ equivalent – the amount before basic rate tax was deducted.

Basic rate tax is 20 per cent, so this means that if you give £10 using Gift Aid, it’s worth £12.50 to the charity.

A Gift Aid declaration must include:

  • your full name
  • your home address
  • the name of the charity
  • details of your donation, and it should say that it’s a Gift Aid donation

If you pay higher rate tax, you can claim the difference between the higher rate of tax 40 and/or 45 per cent and the basic rate of tax 20 per cent on the total ‘gross’ value of your donation to the charity or CASC.

For example, if you donate £100, the total value of your donation to the charity is £125 – so you can claim back:

  • £25 – if you pay tax at 40 per cent (£125 × 20%)
  • £31.25 – if you pay tax at 45 per cent (£125 × 20%) plus (£125 × 5%)

You can make this claim on your Self Assessment tax return

If you are a higher rate tax payer donations made in 2013/14 will save tax at 45 percent, but in 2012/13 the rate was 50 per cent.

You can ask for Gift Aid donations to be treated as being paid in the previous tax year if you paid enough tax that year to cover both any Gift Aid gifts you made that year and the ones you want to backdate.

So if you want to donate now (before the end of the tax year) you could claim back extra tax by carrying it back into the previous tax year.

 

steve@bicknells.net

 

Donate Trade Pounds to Charity and get Cash Back

Bartercard has many charity members who all love getting donations http://belmontmail.co.uk/ZFF-YPOC-E24SJ4HO59/cr.aspx

But often charities and those making donation fail to claim the cash back relating to the donations, for example:

Gift Aid

25% tax refunds in cash http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/GivingMoneyToCharity/DG_10015097

This means that for every £1 donated, you can claim an extra 25 pence.

Individual Tax Relief

If you pay higher rate tax and make a donation through Gift Aid you can claim some tax back too.

Corporation Tax Relief

When your company makes a qualifying donation to a charity the amount paid is treated as a ‘non-trade charge’ – this means your company can make a claim in its Company Tax Return to set the amount of the donation against its taxable profits.

steve@bicknells.net