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How to claim back Tax off your charitable donations – The Gift Aid Scheme.

How to claim back Tax off your charitable donations – The Gift Aid Scheme.

Mike Wakeford

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take your donation and, provided all the qualifying conditions are met, reclaim the basic rate tax allowing for an extra 25p of tax relief on every pound donated to charity.

If you are a higher rate or additional rate taxpayer, you can claim additional tax relief on the difference between the basic rate and your highest tax rate.

For example:

If you donated £5,000 to charity, the total value of the donation to the charity is £6,250. You can claim back additional tax of:

£1,250 if you pay tax at the higher rate of 40% (£6,250 × 20%),

£1,562.50 if you pay tax at the additional rate of 45% (£6,250 × 25%).

If you are a higher or additional rate taxpayer, you can carry back your charitable donations to the previous tax year. A request to carry back the donation must be made before or at the same time as your last year’s Self-Assessment return is completed.

This means that if you made a gift to charity in the current 2022-23 tax year - that ended on 5 April 2023 - you could have accelerated repayment of any tax associated with your charitable giving. This can be a useful strategy to maximise tax relief if you will not pay a higher tax rate in the current tax year but did in the previous one. This should be included as part of the Self-Assessment tax return for 2022-23, which must be submitted by 31 January 2024.

You can only claim if your donations qualify for gift aid. This means that your contributions from both tax years must be at most four times what you paid in tax in the previous year. If you do not complete a tax return, you must use a P810 form to make a claim.

Should you need help and further clarity around filling in your tax return, Moore (South)'s Tax team can help you complete your tax returns on time, correctly and (hopefully!) make them stress-free.