{"id":27120,"date":"2024-08-08T15:38:02","date_gmt":"2024-08-08T14:38:02","guid":{"rendered":"https:\/\/smh.group\/?p=27120"},"modified":"2024-09-25T12:54:27","modified_gmt":"2024-09-25T11:54:27","slug":"how-to-save-money-on-tax-with-gift-aid","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/how-to-save-money-on-tax-with-gift-aid\/","title":{"rendered":"How to save money on tax with Gift Aid"},"content":{"rendered":"

\u2018Tick the Gift Aid\u2019 box to boost your donation to charity and save some tax.<\/strong><\/p>\n

In recent years, requests for national and international donations have increased significantly. You’re likely familiar with the ‘Tick the Gift Aid’ box or being asked to sign a declaration when donating to charity. Generally, taking this step benefits both you and the charity. This straightforward action can make a \u00a3100 donation cost you just \u00a340 (or \u00a332.50 in Scotland).<\/p>\n

When donating with Gift Aid, the charity can reclaim \u00a32 of tax from the government for every \u00a38 you donate. The only constraint is that you must have paid at least as much income tax or capital gains tax in that tax year as the charity will claim. For instance, if you gift \u00a3800 and the charity reclaims \u00a3200, you will need to have paid \u00a3200 in tax.<\/p>\n

If you pay tax at more than basic rate, gifting allows you to reclaim some tax. For example, let\u2019s revisit your \u00a3800 gift. If you have at least \u00a31,000 of income taxed at 40%, then you can personally reclaim \u00a3200 (\u00a31,000 x (40%\u201320%)). This increases to \u00a3250 for 45% taxpayers. However, the process is not automatic and you must remember to make a reclaim, usually through your tax return.<\/p>\n

The tax relief mechanics of Gift Aid donations can provide other tax benefits because the amount of your gift, plus the tax reclaimed by the charity, counts as a deduction in calculating your \u2018adjusted net income\u2019. This income figure is used in three important income thresholds:<\/p>\n