Gift Aid records
Many people make charitable donations around Christmas time and other religious festivals.
If this is your habit, remember that ticking the Gift Aid box on the form when making the donation is a win-win for you and the charity. You can benefit from higher rate tax relief and the charity can reclaim 25% of the gift amount as tax relief from HMRC. Every £100 donated with Gift Aid is worth £125 to the charity.
For the gift to qualify for Gift Aid, you need to declare you are a UK taxpayer and that you pay income tax and/or capital gains tax at least equal to the 25% tax claimed by the charity.
The gross amount of the Gift Aid donation (i.e. amount paid plus the charity’s tax claim) expands your basic rate band for the year in which the donation is made, or in some cases you can carry back this relief to the immediately preceding tax year.
In view of the increase in dividend tax rates due to come into effect on 6 April 2022, many company ownerdirectors will want to maximise their basic rate band for 2021/22, to enable more dividends to be paid this year without incurring higher rate tax.
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| Please record the date and amount of your Gift Aid donations, as we will need this information when completing your tax return for the year. |
