You can give away as much money as you like to charity, but only if you also tick the Gift Aid box. That’s because it makes your donation worth 25% more by reducing your tax bill. But how do you get that added benefit? Who wouldn’t love to give more to a charitable cause without hurting their wallet? Unfortunately, not everyone has the cash at hand for every worthy cause that comes along. However, there are ways to make a charitable gift have an even bigger impact on society. One way is to claim Gift Aid from the charity you want to support with your donation. Read on and discover everything you need to know about this useful benefit and how you can use it for your favorite causes!
What is Gift Aid?
It is a government scheme that allows UK taxpayers to increase their charitable donations by 25%. This means you can give more money to charity and receive a bigger tax rebate on your donation. If you make a £100 donation and claim Gift Aid, it’s worth £125 to the charity. This is because the charity gets back £25 from the government as part of your tax bill. The government wants to encourage more people to give to charity, so they created Gift Aid. This allows you to make your donation go further. It can be worth £700 million per year to charities in the UK alone.
How to Claim Gift Aid
To claim Gift Aid from a charity you have to meet the following criteria: – You must have paid enough income tax and/or capital gains tax in the current tax year (or in the preceding four tax years). – You must be a UK resident and have been for at least three out of the last four years. You must have paid Income Tax and/or Capital Gains Tax in the current tax year and the preceding four tax years. If you’re self-employed, you must have been using Self Assessment to pay tax for at least one of the last three tax years. – You must be making a payment that qualifies as a gift. This means it is given voluntarily with no expectation of being paid back, and it is given with no expectation of goods or services in return. – You must be given to one of the charities listed below.
Which charities can you claim Gift Aid for?
You can claim Gift Aid on donations to UK charities that are registered with HM Revenue & Customs (HMRC) as a gift-aided charities. The full list is available online on the HMRC website, and you can also search for charities online using this same site.
3 simple steps to claiming
Follow these steps to ensure you’re maximizing your charitable donation and getting the most out of your gift. – Choose a charity to donate to. Make sure it’s a registered charity. – Ask the charity if they’re a gift-aided organization. If they are, they’ll give you a form to complete. – Complete the Gift Aid declaration on the form and return it to the charity. – You can also claim Gift Aid for donations made by direct debit or standing order if your charity has chosen to participate in the Give as You Earn (GAYE) program. Your donation will be added to your pay regardless of whether you are employed or self-employed. – If you’re claiming Gift Aid on a donation made by direct debit, you must remember to cancel the donation if you move to a different charity, change your bank account, or want to stop giving.
Important things to remember when claiming Gift Aid
– If you’re not sure if you’re eligible, check with your tax office first. – If you claim Gift Aid on your donations and are no longer eligible to do so, you must inform the charity of this as soon as possible. You must also repay the amount of tax reclaimed on your donations for the previous four years through Self Assessment. – If you’ve paid Income Tax and/or Capital Gains Tax in the current tax year, you can complete the declaration on your regular Self Assessment Tax Return. If you’ve not paid enough tax to cover your donations, you can claim the difference on your next Self Assessment Tax Return.
Conclusion
Gift Aid allows taxpayers to increase their charitable donations by 25%, resulting in more money for good causes. To be able to claim Gift Aid, you must meet certain criteria, including having paid enough income tax in the current tax year. Make sure you follow these 5 steps to claim Gift Aid and get the most out of your charitable donations.
ALSO READ
