Charitable Giving in the UK can come with several tax perks that most are unaware of. Below is a summary of just some of the tax perks of charitable donations.
Your donations will go to your chosen charity/ CASC untaxed.
The HMRC do not tax donations by individuals to charities/ CASCs. Therefore your donation will go to your chosen charity/ CASC in full. This can happen through the mean of Gift Aid, Payroll giving schemes, land/property/shares or in your will.
- These terms also apply to sole traders and partnerships. There are different tax ruling for limited companies (gift relief is seen through corporation tax).
You can deduct charitable donations off of your total taxable income.
Charitable donations within a set threshold are deductible off of your total taxable income. Donations will qualify for gift aid as long as they do not exceed four times of your paid tax on income or capital gains for that tax year. In order to deduct these donations, you must keep thorough records of your donations.
- In order to ensure that charitable donation is beneficial for tax purposes, you should contact a tax professional to ensure the charities accountability and legitimacy is recognised by the HMRC.
Our 4 key Donation tax tips
4 Key Tips
§ Make sure to adopt a proactive donation strategy, that aligns with your own finances, and reflects types of causes you care about (don’t be lured in to the responding only to sudden requests such as after a natural disaster)
§ Always conduct research – don’t always trust charities recommended by a third party as you may find a charity that suits your specific desire to help, this also applies to schemes such as door-to-door giving, as they may not always be a reliable source
§ Try to give to charities that have a good track record of dealing with donations efficiently – either financial or physical items
§ Try not to diversify charitable donations too much, as to avoid unnecessary processing of expenses and receiving an overflow of appeals in your inbox