Does your household pay tax? If the answer is YES than you are probably eligible to sign up to Gift Aid. Gift Aid increases the value of donations to UK charities by allowing them to reclaim basic rate tax on your gift.
If you pay higher rate tax you can claim extra relief on your donations.
If you claim age-related allowances or tax credits, Gift Aid donations can sometimes increase your entitlement.
How Gift Aid works
The Gift Aid scheme is for gifts of money by UK taxpayers. Charities take your donation - which is money you've already paid tax on - and reclaim basic rate tax from HM Revenue & Customs (HMRC) on its 'gross' equivalent - the amount before basic rate tax was deducted.
Basic rate tax is 20 per cent, so this means that if you give £10 using Gift Aid, it's worth £12.50 to the charity. For donations between 6 April 2008 and 5 April 2011 the charity or CASC will also get a separate government supplement of 3p on every pound you give.
How to pay your subscriptions using Gift Aid
In order to make a Gift Aid donation you'll need to make a Gift Aid declaration. We have a simple form for you to complete (see bottom of page) - one form can cover every payment made to our charity for whatever period you choose and can cover payments you have already made and payments/gifts you may make in the future.
Making sure you've paid enough tax to use Gift Aid
You can use Gift Aid if the amount of Income Tax and/or Capital Gains Tax you've paid in the tax year (6 April one year to 5 April the next) in which your donation is made is at least equal to the amount of basic rate tax we are reclaiming on your payments. If you make a number of payments you will need to consider the tax you've paid on each one on an accumulative basis.
You don't necessarily have to be working to be paying tax. Apart from tax on income from a job or self-employment, the tax you've paid could include:
tax deducted at source from savings interest
tax on State Pension and/or other pensions
tax on investment or rental income
Capital Gains Tax on gains
But only UK tax counts, so if you only pay tax outside the UK you won’t be able to use Gift Aid.
Claiming back higher rate tax
If you pay higher rate tax, you can claim the difference between the higher rate of tax (40 per cent) and the basic rate of tax (20 per cent) on the total (gross) value of your donation to us.
For example, if you donate £100, the total value of your donation to us is £125 - so you can claim back 20 per cent of this (£25) for yourself. You can make this claim on your Self Assessment tax return if you were sent one.
Gift Aid - effect on age-related Personal Allowance, age-related Married Couple's Allowance or tax credit claims
If you claim the age-related Personal Allowance or Married Couple's Allowance or tax credits it's important to let HMRC know about any Gift Aid donations. They will subtract the amount you donate plus the basic rate tax from your total income and use the reduced figure to work out the value of your allowances or tax credits.
This may have the effect of increasing these allowances or credits if your income was above the relevant 'income limit' that applies.
Telling HMRC about your Gift Aid donations
It’s important to keep a record of the total amount of your Gift Aid donations for each tax year. You’ll need to let HMRC know about your Gift Aid donations if:
· you claim age-related Personal Allowance, Married Couple’s Allowance or tax credits
· you pay higher rate tax
· you want to backdate a Gift Aid donation
If you normally complete a tax return you can tell HMRC about your Gift Aid donations by completing the section on Gift Aid payments.
If you don’t complete a return, you can give the details on form P810 Tax Review - available from your Tax Office, or telephone your Tax Office and ask them to make a change to your tax code.
If you are eligable to gift aid your subscriptions please complete the forms below and contact our chairman Michael Main. He will need to keep the signed forms on record as evidence to justify our claims to the Inland Revenue.