The lowdown on giving to charity

Last updated 19 December 2019

We were recently asked "why does HMRC want to know if I've given money to charity"? 

The straightforward answer is because there is tax relief on your donations.

If you make a donation and elect for gift aid, the donation is made assuming that the charity will be able to reclaim the tax on it. Donate £1 and the charity can claim 25p back (with a basic rate of 20%).

If you are a higher rate taxpayer, then you can get any additional relief through your return.

And if you make a donation without gift aid, then you get all the relief on your return.

Note, that the gift aid only applies if you're actually paying tax (so if you're earning less than the personal allowances, or you're getting other reliefs, then you shouldn't be ticking the gift aid box).

And you can't get gift aid if you're enjoying a benefit. A ticket to a charity dinner is not tax deductible, whatever the quality of the catering!

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