News Entry
Update on Gift Aid
Date Posted: Thursday 03 April 2008
All should be aware that from 6 April 2008 the basic rate of income tax is reduced from 22p to 20p in the pound. This has the effect of reducing by 11.4% the amount of Gift Aid relief which can be reclaimed by charities and churches. We have asked members to consider increasing their pledged giving. The reduced tax rate means that you can increase your charitable giving by 2.6% at no extra cost to yourself. For example, a monthly donation of £50 could be increased to £51.28, the increase being funded entirely from a reduced personal tax cost.
However, we can also advise that in the Budget statement on 12 March, a transitional relief was introduced for charities and churches. For a period of 3 years, this guarantees that Gift Aid relief will be paid as if the basic rate of tax had not been reduced. Since this is for only a limited period of time, we would still ask you to continue to consider the level of your giving.
If you’re a higher rate (40%) taxpayer, you may wish to note that the reduced basic rate gives you an increased personal benefit, since you are entitled to claim through your tax return the difference between the higher rate of tax paid by you and the basic rate of tax reclaimed by the charity. For example, up to 5 April 2008, a higher rate taxpayer giving £1000 per year can reclaim a personal repayment of £231 through their tax return. From 6 April 2008, the amount of this repayment inreases to £250 per £1000.
Donations through payroll giving are unaffected by any of the above arrangements, since these donations are made before deduction of tax.
If you complete a tax return, you may wish to know that HM Revenue & Customs provide a facility for all or part of any tax repayment due to be mandated to a registered charity. Tax returns being sent out this month will include form SA100 Charity 2008, which can be used for this purpose. To mandate all or part of a tax repayment to Old Saint Paul’s the code PAJ24KG should be inserted at box 5 on the form. Ticking box 6 will increase this amount by 28% for Gift Aid relief.
Further information about giving and Gift Aid can be obtained from the or the .
Category: Vestry & Committees
