If you are giving to charity this Christmas, make sure you claim Gift Aid to take advantage of a generous tax break, says David Prosser in The Independent.
As long as you’re a taxpayer and can declare yourself to be such “verbally or in writing”, you can claim Gift Aid on any donation you make to a registered charity. A change to the rules last month means that charities can now accept a donor’s agreement for them to claim Gift Aid over the phone rather than having to write to each donor confirming that Gift Aid has been claimed.
By claiming Gift Aid, the charity gets basic-rate tax relief on your gift. That means that every £1 you give is worth £1.28 to the charity. Higher-rate taxpayers are allowed to claim the difference between the basic and higher rates of income tax on their tax returns, which is currently 18%. So if you gave away £400 one year and claimed Gift Aid, the charity would receive an extra £112.82 (calculate this by multiplying the sum by 22/78) and you would claim back £92.30 (18% of £512.82) on your self-assessment form (see www.hmrc.gov.uk).
You may be able to persuade your employer to set up a payroll-giving scheme. In this way, donations are made from your salary to charity tax-free, so a monthly pledge of £10 would mean £7.80 off a basic-rate taxpayer’s pay packet. The scheme is administered by the Charities Aid Foundation (www.cafonline.org).