CHRISTMAS – THE SEASON FOR GIVING

Christmas is the season for giving and for many people it’s a time to make a donation to their favourite charity. But unless you take advantage of all the tax breaks that are available for charitable donations, your cash gift may not be worth as much as you think.

Steve Screech, associate partner at independent professional advisory firm, Broomfield & Alexander, explains some of the ways that you can make your donation worth more to your chosen charity.

“Gift Aid is the main way for tax efficient giving to charities. It applies to any donation – large or small, regular or one-off. Simply by confirming that you are a taxpayer, you can ensure that your chosen charities are able to reclaim the basic rate of income tax on all your donations – this is equal to 28 per cent of the money donated. This confirmation only has to be completed once for each charity – it can even be done by telephone or over the Internet – and it remains valid for as long as you remain a taxpayer.

“Payroll giving is also another popular way of making donations to charity. This scheme allows you to make gross donations to charity. Where your employer participates in such arrangements, the donation is deducted from your salary before tax is calculated, so it gets full tax relief. For example, if you decided to give £10 from your salary to your favourite charity, they would actually receive £12.82. There is no statutory minimum or maximum limit, although individual schemes may impose a minimum monthly donation limit. As an added incentive, the government will add an extra 10 per cent to every donation you make through payroll giving up to April 2004,” Mr Screech concluded.

For more information about how you can make your money go further over Christmas and into the New Year, visit the Broomfield & Alexander website at www.broomfield.co.uk

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