Chamber Chat with Alastair Richards

April 19, 2022 - 12:00am

Chamber Chat with Alastair Richards

When giving, let the taxman take the strain

If you live or work in Lancaster, then you’ll be aware that there are plenty of charities out there asking you to support them. Whether it’s a national, regional, local or grassroots organisation, there are many deserving causes to give to.

For many of us, the most common way to give is to put some coins or, if we’re feeling generous, a note in the collection tin. Doing this is great, but it doesn’t utilise the tax advantages which are available when giving to charities.

I’m always amazed, when I ask people if they Gift Aid their donation at the number who haven’t come across this great tax arrangement. If you’re a UK Income Tax payer and make a donation to charity, make sure you tick the box on the website and provide the information which will enable the charity to take advantage of this tax rebate. A gift-aided donation of £10 from you will enable the charity to claim back the tax you had to pay in order to earn that money, and so the taxman gives them £2.50. It costs you nothing but makes a real difference to the worthy cause.

Even better, if you’re a 40% tax payer, the charity can claim back 20% and you can reclaim the other 20% of the tax paid through your own self assessment tax return. This reduces your overall tax payable for the year and enables you to give even more to those great causes. What you might be surprised to learn is that some of those charitable causes you support through an annual membership also count that income as a gift-aided donation, so you might have more to claim than you realise.

If you’re giving through a company, then remember that donations to a UK registered charity can normally be offset against your Corporation Tax bill for the year – although make sure you keep records of this and take advice if you need to. The donations don’t even need to be in money but can be in equipment, employee secondments or sponsorship.

As with any scheme, there is small print to take into account so make sure you take advice or look at the relevant websites. Your chosen charity will normally be able to help you.

Give, and when you do, let the tax man take the strain.

Alastair Richards is Chief Executive Officer at North-West Cancer Research. He is also a director of theChamber.