Martin Lewis

Charity Giving
Pay less (or nowt) give more!

Printable VersionAddThis Social Bookmark ButtonEmail Article
Important All changes, updates and new deals go in the Weekly MoneySaving Email
Free, Ad Free and Spam Free!


If you ‘do a lot for charidee', force the tax system to help and you can ‘do a liddle more.' This article tells you how to give 80% more to charity than you pay.




Gift Aid

Payroll Giving
An Easy Method

Sharing The Wealth

 Other Articles/Discuss


Can you spare a dime?

Any charity registered with the Charity Commission, or the Office of the Scottish Charity Regulator (small charities and ones based in Northern Ireland register with HM Revenue & Customs instead for charitable tax exemption) can take advantage of schemes allowing them to reclaim your tax.  It's easy to find out as it'll have ‘registered charity' on its literature, plus organisations like chuches, universities, amature sports clubs and some schools and hospitals automatically have charitable status.



Maximise your giving, Minimise your cost


The simplest way to give is via ‘gift aid'. This allows charities to claw back your tax from the Inland Revenue on either one-off or regular donations. There's no minimum contribution so even on a pound the tax is reclaimable. 
All the charity needs is your name, address and a declaration that you're a UK taxpayer. As this can be verbal it can even be done over the phone.

How does this benefit you and the charity?

Charities reclaim the tax at the basic 22% rate, which due to the way the numbers work means they get around 28% more than you donate (e.g. you give £50, the charity gets £64.10).

Those people paying tax at the higher 40% rate are able to reclaim the extra 18% tax they've paid for themselves on top of this, so on £50 that's another £11.50. However, the tax self-assessment form does also include a note of charity gifts so higher rate taxpayers can choose to donate this extra tax to charity too.


Payroll Giving

 

Another easy solution is to give via ‘payroll giving' where you donate a regular amount directly from your salary, through your employer's payroll. The donation is given before any tax is taken off, which means the charity automatically receives both a basic rate taxpayer's and all of a higher rate taxpayer's tax.

The only problem is employers must have a scheme in place; you can't just do it on your own. Ask your finance department if your firm runs a scheme. If not it's worth trying to encourage it. This is a simple process run through the automated payroll. Unfortunately those who are self-employed sole traders can't access payroll giving.

Feed the starving at no cost to you

There is a way to help at no cost. Sites like thehungersite.com work by sponsorship. You go to the site, click the link, and the sponsors pay for food to be donated to someone who is starving. There are other similar sites which donate to various causes. Read Feed The Starving At No Cost To You.


Get a charity chequebook


One final tip. The Charities Aid Foundation runs a special Charity Account. You pay money in directly through either Gift Aid or Payroll giving, it automatically collects the tax and adds it to your account.

After this you can use its special card or cheque-book to donate from this account to a charity of your choice. Its big advantage is you can donate tax-efficiently on impulse, even putting the special cheques in collection tins to ensure the charity gains the maximum amount.

Tax breaks can make a real difference to the size of donations. To give £20 using the gift aid scheme a basic rate taxpayer would only need to give £15.60 and a higher rate taxpayer just £12 (assuming the extra tax is donated to charity too). Overall this means to give a charity £240 in a year, it would only cost a higher rate taxpayer £144.

The solid chink when you pop a few pennies in the charity bucket still provides well-needed donations. However, if you're planning to do your bit, taking advantage of these tax benefits should turn that solid chink into a solid chunk of cash.


Give more than you pay: The cost of donating £20 a month to charity


Monthly

Annually


Basic Rate Taxpayer Pays

Higher Rate Taxpayer Pays

Charity Receives

Basic Rate Taxpayer Pays

Higher Rate Taxpayer Pays

Charity Receives

Gift Aid

£15.60

£12

£20 (1)

£187

£144

£240

(1) Assumes higher rate taxpayer donates all tax gains to the charity



Donate your old shares


Donating shares to charity is a less obvious way of giving but there are tax benefits here too. Sign over your shares to charity and there's no capital gains tax and you can offset their value (on the day you transfer) against income tax.

There's a number of ways this can be beneficial:

Perhaps you've a shareholding so small it's not worth selling. Or it can be a useful way to give if you've used up your capital gains tax limit (you can make up to £7,900 of one-off gains a year before tax is applicable), you want to offload some shares and the income tax write off means you get a double hit tax benefit.

The transfer form itself works as a record of the transfer and the responsibility of selling the shares moves to the charity, which can wait until it builds up a bigger portfolio to cut down stockbroking costs.

To ensure you stay up to date on this, all changes will be in

The Free Weekly Money Tips Email

Other Articles You May Be Interested In

Cheapest Gas and Electricity Supplier

Cheap Car Insurance: A Powerful Cost Cutting System

Loyalty Schemes: Tricks To Improve Your Stash

Orange Wednesday 2for1 Film Tickets Loophole

Ask a Question / Discuss

Charity: Pay Less, Give More

 



 

 


Always double check the product details before signing up to them
Spotted a broken link/out of date info? Let us know at brokenlink@moneysavingexpert.com

 



LINKS THAT HELP THIS SITE (have a * above)
(this has no impact on product or recommendation - see explanation below)
N/A

N/A

LINKS THAT DON'T HELP THIS SITE

cafonline

thehungersite

Explanation

Two types of contacts are listed. The first (which all have a * within the main body of the articles) help MoneySavingExpert.com stay ad-free and free to use, as they're ‘affiliated links' which invisibly take you usually via commercial price comparison services like Moneysupermarket, Uswitch or Find, which then pay this site. The second type doesn't help (and don't have a *).

You shouldn't notice any difference, the links don't impact the product at all and the editorial line (the things I write) is NEVER impacted by the revenue. If it isn't possible to get an affiliate link for the best product, it is still recommended and still included in exactly the same way. For more details read how this site is financed.

 

Printable VersionAddThis Social Bookmark ButtonEmail Article

Martins Weekly Money Tips
Two thirds of top tips close within a week!
The weekly e-mail ensures you don't miss out.

Get The Email »
View FAQ's          
It's Free, Ad-Free & Spam Free
  • Travel across the UK for £1 e/w: National Express
  • Grab £1,000s of free childcare: Go quick!
  • Free £100 with 0% overdraft: New top bank account
  • Bank charges hold renewed: Hope for those in hardship
This website is based on journalistic research. It does not constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research . See Full Terms & Conditions and Privacy Policy (last updated 19.12.06). © Martin Lewis and Martin S Lewis Ltd. 'Martin Lewis' and 'Money Saving Expert' are registered trademarks belonging to Martin Lewis.