Giving to Charities is more important now than ever

Giving to Charities is more important now than ever

The COVID-19 pandemic had a profound impact on many charities. With some charities being hit by increased demand and struggling to fund their services as restrictions were imposed.

Giving to Charities became more attractive From April 2019, the upper limit for trading that charities can carry out without incurring a tax liability rose. This measure increased the small trading tax exemption limits for charities that apply to trading that does not relate to a charity’s primary purpose.

Since April 2019, charity shops using the Retail Gift Aid Scheme can send letters to donors every three years when their goods raise less than £20 a year, rather than every tax year.

The individual donation limit under the Gift Aid Small Donations Scheme also increased from £20 to £30. This applies to small collections where it is impractical to obtain a Gift Aid declaration.

Making the most of charity donations

People can be concerned that their donations to charity may be reduced by tax or administrative costs, preventing the full amount from reaching the people or causes they really want to help. Fortunately there are ways to make the most of every donation to charity.

There are a number of ways to give to charity tax-effectively too, such as by donating straight from your salary before tax is deducted through a payroll giving scheme, donating shares to charity or leaving a charitable legacy in your Will. These methods of giving help to ensure your chosen charities benefit as much as possible from your support.

Donating to the causes you care about not only benefits the charities themselves, it can be rewarding for you too. People give to charity on a regular basis to support causes they believe in, as well as for the positive effect it has on their own lives.

Donating using Gift Aid

If you’re a UK taxpayer, you can boost the amount of every charity donation you make by giving through Gift Aid, an Income Tax relief created to help charities get the most out of the funds they receive. Gift Aid enables the charity to recover the basic rate of tax on your donation, the scheme adds 25p to each

£1 you give at no extra cost to you.

Donating from your wages or pension

If your employer, company or personal pension provider runs a Payroll Giving

scheme, you can donate straight from your wages or pension. This happens before tax is deducted from your income. The tax relief you get depends on the rate of tax you pay.

Reducing Inheritance Tax

If you’re worried about the Inheritance Tax that might have to be paid when you die, giving away some of your money to charity – either now or in your will can assist in reducing your Inheritance Tax liability.

Tax and estate planning is not regulated by the Financial Conduct Authority.