Tax Reliefs When Donating to Charity
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Tax Reliefs When Donating to Charity
Donating to charity can benefit both the charity and donor. Many types of charitable donations made in the UK attract tax reliefs for the donor, and when approached strategically, individuals and businesses can increase the value of their contributions.
At BCS Accountants, this month’s blog looks at available tax reliefs when donating to charity. For more information, contact us on 01524 824111.
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Gift Aid
Gift Aid is a way to maximise the value of personal donations. It allows charities to reclaim basic rate on tax on donations, increasing the value of your contribution at no additional cost to you. When you donate under Gift Aid, the charity reclaims the basic 20% rate of tax from HMRC.
For higher and additional rate taxpayers, the benefit goes further. However, there are compliance requirements. To reclaim Gift Aid, you must have paid sufficient tax.
Give-As-You-Earn
Also known as Payroll Giving, it offers a simpler way for employees who want to donate regularly. Contributions are deducted from gross salary before tax is applied, meaning relief is given immediately.
However, there is a key distinction compared to Gift Aid. Charities don’t receive the additional uplift under Give-As-You-Earn, which means the overall benefit to the charity may be lower.
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Donating Shares, Land and Property
For those with investment portfolios or property holdings, donating land, property or shares can be donated to charities without being subject to tax. Additionally, you can claim income and capital gains tax relief through these donations.
It is important to note that only certain types of shares qualify for this relief.
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Is There a Limit on Charity Tax Relief?
There is no limit on the amount you can donate and claim tax relief on. However, you must have paid enough income tax or capital gains tax in the year to cover the percentage claimed by the charity and any additional relief you claim yourself.
If you haven’t paid enough tax, HMRC will ask you to pay the difference.
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Contact BCS Accountants
If you require further advice, contact our team at BCS Accountants. We cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Care of – TRW Accountants
95 King Street
Lancaster, LA1 1RH
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
