Gift Aid Payments
Don’t forget to claim! Tax relief!
In preparing for our first house move after 23 years my wife and I found many things that we no longer required. All those old Vinyl albums for example (of course after making sure we had them in CD format!) along with toys and games and numerous other things were taken to our local cancer charity shop.
Most charity shops these days are very organised and “bar code” each and every item as it arrives. This allows them to identify who donated it when it is sold. We were then asked to sign a form so that the money raised from the sale of our gifts may be donated under the “gift aid” scheme in our name.
For those not aware of what “gift aid” means, if you are a taxpayer, any gift that you make to a registered charity is deemed to be made after you have deducted tax at 20 %. That means for every £1 paid to the charity itself they are able to claim a further 25 pence back from HM Revenue and Customs.
However what a lot of people don’t realise is that if you are a higher rate taxpayer you can claim further relief in respect of the donation made. Thus if you give £100 to charity the donation is grossed up to a total of £125 and as a 40 % tax payer you would then receive a further £25 tax relief! If you add this up for all the donations you make in the year it could be quite a few bob!
Over a period of six or seven weeks the charity contacted us and much to our surprise and delight they were able to raise several hundred pounds from the items we had donated. Add to this the gift aid relief that the charity will receive and the amount becomes quite substantial!
It then occurred to me that I and many of my friends and family make random gift aid payments during the year be it Children in Need, Comic Relief or Charity events etc. and like so many I failed to keep a note of the total payments and almost certainly did not claim higher rate tax relief!
Perhaps therefore if you are a higher rate taxpayer, you should start to keep a note of exactly what payments you make in each tax year and then contact HM Revenue and Customs to claim the appropriate higher rate relief. OK it may not be much, but perhaps the extra few pounds that lands in your bank account will make you want to give a bit more the next time you make a charitable donation!Talk to Barnes Roffe today