Tax Effective Giving

There are various tax effective giving options available, however it is VERY IMPORTANT to check the Inland Revenue website or indeed telephone the IR to ask any questions you have or to check what you are saying is correct.  Fundraisers are not accountants and therefore although you should know the processes individuals need to consult their own accountants for some of the following information.

However here it is in a brief summary:-
 
 
 

1.    INDIVIDUALS - Gift Aid

If an individual is able to complete a Gift Aid Declaration form (the IR has some examples that Charities can use) the Charity can claim 28.2p on each £1 donated.

This is a simple declaration to make and a simple process to claim from the IR although you will need to keep accurate records of the declarations and donations received.

Interesting points:  You can get a declaration over the phone although you do need to follow up with a letter to the donor as confirmation of gift aid declaration.

The potential to compelte a Gift Aid Declaration should be where ever appropriate and your donor base educated as it does seem some people do not understand the process.

N.B.  Higher Rate Tax Payers

The individual should include their gift on their tax return as the individual can benefit from the extra tax relief.
 

Giving of Shares

If an individual chooses to give quoted shares, the individual is exempt from Income Tax on the market value of the shares.
 

N.B.  Note that events where individuals 'benefit' is more complicated issue for Gift Aid and it is advisable to contact the Inland Revenue to find out exactly what the process is and make a note of what they say.

2.    Payroll Giving
 

Up until 2003 the government will contribute £1 for every £10 donated via payroll giving.
 
 

3.    Legacy Giving
 

Legacy gifts have an Inheritance Tax threshold.  Check current data as this often changes in budgets!
 

4.  Company Giving
 

Companies now make gross donations and get the tax relief themselves at their company tax rate.
 
 
 
 

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