Business Newsletters - Spring 2007

Giving to Charity

Charitable donations made under the Gift Aid scheme can result in significant benefits for both the donor and the charity. The charity is able to claim back tax at 22% on any donations and if the donor is a higher rate taxpayer the gift will qualify for 40% tax relief. Therefore a cash gift of £78 will generate a tax refund of £22 for the charity so that it ends up with £100. The donor will get higher rate tax relief of £18 so that the net cost of the gift is only £60.

Tip
Tax relief against 2006/07 income is possible for charitable donations made between 6 April 2007 and 31 January 2008 providing the payment is made before filing the 2006/07 tax return.

Always remember to keep a record of any gifts you make.

It is also possible to make gifts of quoted shares and securities or land and buildings to charities and claim income tax relief on the value of the gift. This may be tax efficient for larger charitable donations.

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