Comic Relief earlier this year raised staggering amounts for good causes, home and abroad, earlier this year, and with over 164,000 charities registered with The Charity Commission as of September 2014, many more avenues are available for giving to charity. There are numerous ways to give to good causes, and donors can save on tax too, making it very much a “win-win” situation.
Here are just two ways:
Gift Aid is a form of tax relief on your donations which works by the charities claiming the tax paid by their donors at the basic rate. It means that for every £1 donated to a charity or amateur sports club, they can claim an extra 25p on top. This is simply due to the fact that a tax payer would need to earn £1.25 to take home the £1 donation, as the tax man would receive 20% (25p).
In order to gift aid your donation, you need to make a gift aid declaration that includes your full name and address along with the charity details. If you choose to donate via sites such as Just Giving, it is as simple as ticking a box, and you can also gift aid on things you give to a charity shop.
Give As You Earn
Many companies have signed up to a payroll giving scheme called ‘Give As You Earn’, and if you are a PAYE worker you can make regular donations to charity.
Give As You Earn is run by the Charities Aid Foundation and allows you to make regular or one-off donations to charities of your choice directly from your pre-tax pay packet. This means that part of the donation is coming from money that would otherwise be going to the taxman. For example, if a basic rate taxpayer made a £100 donation, HMRC would top it up with the £25 tax amount and the charity would get £125.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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