Gift Aid 'can help taxpayers'

Date: 13th October 2009

Significant tax efficiencies can be found in Gift Aid charity donations, a new report shows.

Analysis from financial website Lovemoney.com demonstrated that higher rate taxpayers can claim back 18p for every pound donated via Gift Aid on their self assessment tax returns.

The efficiencies result from the fact that those who pay more income tax are allowed to reclaim the difference between the higher rate and the basic rate for charity donations.

Additionally, the government's Gift Aid policy gives charities themselves a tax boost by allowing them to claim back the entire 20 per cent rate paid by donors on all monies given.

Lovemoney.com also said that many charities have been hit hard by the recession, with income from investments and donations from individuals both suffering.

"At the moment, it's particularly important that charitable giving is done in the most effective way possible," the report added.

"Donations are beginning to dry up."