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Christmas is traditionally the season for giving – not just to our friends and family but to charity as well. Last year, the Asian tsunami struck on Boxing Day and many of us got our cheque books out right away to help the many, many thousands affected. And this year, I find that practically everyone I know seems to have spent November either running or walking through New York for one good cause or another. So I’m going to have to cough up a fair whack of sponsorship money.
But don’t forget about Gift Aid. Provided that you are a UK taxpayer, by ticking the Gift Aid box on the donation form, you can boost the charity’s income by 28%. This means that, if you give, for example, Stonewall (or any other charity) £50, they can claim an extra £14 from the taxman! Even better, if you earned more than £36,145 in the tax year which ended in April 2005, you are likely to be a higher rate taxpayer – and that means that you could get £11.50 back from the tax man, too. So, in effect, handing over £50 to a charity means that you pay only £38.50 and the charity gets £64! Gordon Brown pays the difference!
If you are a higher rate taxpayer and have made donations via Gift Aid or under deed of covenant, make sure you claim the extra relief on your 2005 tax return. If you’ve already sent it to the Revenue, you can contact them and explain that you need to make a correction. You can even go back six years to claim a repayment or reduction in your tax bill.
But what if you never bothered ticking the Gift Aid box in the past? The good news is that it is possible to do it retrospectively. So, even if you made the payment in an earlier tax year, you can bring it within Gift Aid now. If this applies to you, contact the charity and they’ll provide you with the forms you need – they’ll be keen to help, as it means more money for them too. With all that tax relief available, it seems silly not to take advantage of it.
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