With the state of the world today, more and more people may be considering donating money to charity to help those in need.
Did you know that by doing so, you could also get tax relief on the charitable donations and the charity could reclaim an extra 25p for every £1 you give?
This is done by completing a gift aid declaration with the charity or community amateur sports club (CASCs).
As a result of this declaration, the charity is able to reclaim the basic rate tax that is deemed to have paid on the donation. The basic rate band is then extended by the gross donation to give tax relief on this.
For example, if you donate £100 and make a gift aid declaration, the charity can reclaim £25 making a total donation in their hands of £125. The basic rate band will be extended by £125 and higher rate taxpayers would see a reduction in their tax liability of £25 (£125 x 20%).
Please note that if you do not pay enough tax to cover the amount reclaimed by the charity on your donation, this will result in a tax liability for yourself to recover the amount reclaimed.
If you have previously made a gift aid declaration but have stopped paying enough tax, you will need to inform the charity that this is the case.
To discuss this in more detail, please get in touch with Keely Hughes