Gift Aid for 50% taxpayers

How Gift Aid works - from the tax people at HMRC

The Gift Aid scheme is for gifts of money by individuals who pay UK tax. Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities or CASCs take your donation - which is money you've already paid tax on - and reclaim the 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 three pence on every pound you give.

Claiming back higher rate tax

If you pay higher rate tax, you can claim the difference between the higher rate of tax 40 and/or 50 per cent and the basic rate of tax 20 per cent on the total 'gross' value of your donation to the charity or CASC.
For example, if you donate £100, the total value of your donation to the charity is £125 - so you can claim back:
£25 - if you pay tax at 40 per cent (£125 × 20%)
£37.50 - if you pay tax at 50 per cent (£125 × 20%) plus (£125 × 10%)

HMRC on Gift Aid

Illiogical tax break will discourage giving

The country's leading tax body has branded government plans to encourage charitable giving in legacies as "arbitrary, complex and illogical".

The plans, announced in this year's budget, would give a tax discount to people who give 10% or more of their estates to charity.

Currently, any money and other assets above a threshold of £325,000 are taxed at 40%. Qualifying charitable givers would be charged a lower rate of 36% from April next year.

But the Chartered Institute of Taxation has protested that the proposals are complicated, capricious and counterproductive.

Its tax experts are worried that the new system would discourage would-be givers from handing money to charity via regular giving or in their wills.

Instead they recommend that any charitable gift in a legacy receives an automatic 11% tax perk for the charity.

Give books and tat -- and get tax back

Had a big clearout over the weekend and took 4 crates of children's books to Oxfam.

What was new to me ( maybe not to many readers) is that they can claims back tax on the value of what you give.

It's the Tag your Bag scheme, for which you have to be registed with them for Gift Aid.

Effectively, they act as your agent in selling the goods, then you donate the money on which the tax refund is claimed.

Here the tax people HMRC explain how charities can do this, so even a small local charity might be able to take advantage -- and boost the value of donations by 28%.