In the United Kingdom, you can get tax relief on donations made to charity through various schemes, primarily Gift Aid. Here’s how to get tax relief on donations to charity:
Make a Qualifying Donation: To claim tax relief on your donation, you must make a qualifying donation to a registered charity or community amateur sports club (CASC) in the UK. Make sure you keep records of your donations, including the date, the name of the charity, and the amount donated.
Complete a Gift Aid Declaration: To claim Gift Aid tax relief, you need to complete a Gift Aid Declaration form provided by the charity. This form authorizes the charity to claim back 25p from HM Revenue and Customs (HMRC) for every £1 you donate, provided you are a UK taxpayer and have paid enough income or capital gains tax to cover the amount claimed.
Confirm Your Taxpayer Status: To be eligible for Gift Aid, you must be a UK taxpayer. You can be either an income taxpayer or a capital gains taxpayer. You need to have paid at least as much in income or capital gains tax as the charity will claim in Gift Aid on your donations. If you haven’t paid enough tax, you will be responsible for covering the difference.
Keep Records: It’s essential to keep records of all your donations and Gift Aid Declarations. These records can include bank statements, receipts, and acknowledgment letters from the charities.
Claim Tax Relief: If you’re a higher or additional rate taxpayer, you can claim additional tax relief on your charitable donations through your self-assessment tax return. You can claim back the difference between the basic rate (20%) and your highest rate of income tax (40% or 45%) on the total gross value of your donations.
Payroll Giving: Some employers offer payroll giving schemes, allowing you to make regular donations to charity directly from your salary before tax is deducted. This means you get immediate tax relief on your donations without needing to claim it separately.
Tax laws and regulations can change over time, so it’s essential to stay informed and ensure you are following the current rules for claiming tax relief on charitable donations. If you have specific questions or need assistance with your tax return, consider consulting with a tax advisor or contacting HMRC for guidance.