Friday 13 March is Red Nose Day. So for the next week, expect to be harangued for money whenever you turn on the TV or open a newspaper.
But before you hand over your hard-earned cash, make sure you opt in to Gift Aid. That way the government has to chip in too. “Anyone giving money simply has to sign a Gift Aid declaration form and the charity can reclaim the income tax,” says The Daily Telegraph.
Gift Aid is tax relief on money donated to UK charities that lets charities claim an extra 25% from the government for every donation. Also, the 2008 budget stated the government would pay an extra 3p on every pound until 5 April 2011. So if you opt in to Gift Aid when you donate, a charity gets an extra 28p on every pound you give.
Higher-rate taxpayers can up the donation further by claiming back the difference between basic-rate and higher-rate tax when they fill in their self-assessment form. The 25p (125p x 20%) effectively refunded on every pound can be kept, or given to charity. This means that if a higher-rate taxpayer donates £100, the charity could receive up to £153 in total through Gift Aid.
Overall, it’s well worth using Gift Aid when you give to charity – only around 60% of charity donations include it – as the other 40% could equate to almost £1bn of extra income for British charities every year, says Richard Dyson in The Mail on Sunday. With charity donations falling as the recession deepens, every extra penny counts.