Charitable Donations

Gift Aid: Claim your own tax relief…
When we make gift aid donations to registered charities, the charity is able to reclaim 20% of what we give from HMRC, provided we have paid sufficient tax to frank the gift made. Donors that pay tax at rates higher than 20% can also claim further tax relief from HMRC. A gift of £100 provides tax relief to a 40% taxpayer of £25 on top of the £20 that the charity can reclaim. But the relief must be claimed – it will not happen automatically.

Donors with income levels around the £50,000 mark and in excess of £100,000 are entitled to even more relief as donations affect the calculation of the high income child benefit charge and the personal allowance restriction rules.

It’s also worth mentioning that gift aid payments can be related to the previous year, provided the donations are made before the tax return for the earlier year is submitted. So this is one way in which action can be taken now to reduce tax due for 2015/16. In some cases relief is available at an effective rate of 60%. Don’t look a gift horse in the mouth, as they say.

Most of us make gift aid payments to some degree. I enjoyed my summer visits to HMS Belfast and the Portsmouth Dockyards. Entry fees were pricey, but could be gift aided, so I can enjoy claiming some tax relief as well!

Disclaimer - All information in this post was correct at time of writing.