Santa fun run? Don't forget gift aid on charitable giving
Wednesday 7 December 2016, Will you be sponsoring a friend to ditch the sleigh and dance, prance or dash away in a charity Santa fun run this Christmas? ICAEW explains how you could claim tax relief on charitable giving in your tax return.
Anita Monteith, ICAEW tax manager, explains:
“The festive season is often when people think about others and donate to charity. It is important if you want to include Gift Aid to your donations that you make sure you are eligible. If you do stop paying enough tax, you must remember to withdraw any existing declarations for ongoing donations and let any charities you do support know.
Are you eligible for Gift Aid?
- For a charity to claim Gift Aid on your donation you must first have paid UK income or Capital Gains Tax during one financial year
- The tax you pay must be equivalent to the amount of Gift Aid the charity will reclaim on your donation during that tax year
- Increases to the personal allowance have taken significant numbers of individuals out of income. There is a risk that more people will now pay insufficient tax to cover gift aid donations. If this is the case, liability falls on the individual to make good any shortfall to HMRC
Anita adds: “Christmas time is the perfect time to sit down and complete your online self-assessment ahead of the 31 January deadline – 2,044* people chose to file their tax return on Christmas Day last year. Many people often do not realise when they complete their self-assessment that they could be saving money by taking advantage of tax reliefs. For example, charitable giving, if you keep records showing the date, the amount and which charities you have donated to you can reclaim income tax on the sum. Even if you used gift aid, higher rate relief may still be yours to claim.”
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