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Increasing your Gift Aid take from higher rate taxpayers

Increasing your Gift Aid take from higher rate taxpayers

I know Gift Aid can seem dull, but it really is worth getting right, especially with regard to higher rate taxpayers. I picked up a good tip recently for charities looking to maximise their return from wealthier donors. It works like this.

Those donors who pay 40% or 50% tax can reclaim the difference between what they have paid in tax and the Gift Aid claimed by the charity. They reclaim this by inserting details of their donations on their annual tax return. However, it is also possible for them to nominate a charity (one only) to receive this rebate, using HMRC form “SA100 Charity” in their self assessment.

Some charities are making effective use of this rule by sending donors an SA100 Charity form towards the end of the calendar year, with their charity’s HMRC tax reference number already entered on it. This enables the donor very simply to assign their additional tax rebate to the charity when they complete their tax return (usually in January).

You may of course know some of your higher rate tax paying donors, but not in all cases, so how do you decide who should receive a form? Again, some charities are writing to all Gift Aid donors with a form, to ensure they reach all the higher rate tax payers. The cost of this is likely to be more than offset by the additional tax reclaim.

For further details see www.tax-effectivegiving.org.uk

To obtain the correct form, see www.hmrc.gov.uk/forms/sa100-charity.pdf

If you have donors who are higher rate tax payers, this is a real no brainer.

Simon George, BSc (hons) FInstF (dip) FRSA is a Director of Wootton George Consulting and has been fundraising since 1987. He has special interests in fundraising strategy, legacies and charitable trusts. A longstanding member of the Institute of Fundraising, he founded its Trusts and Statutory Special Interest Group in 1999 and was also the first Chair of the IoF’s West Midlands region. He has written two e-books on legacies and grant fundraising, published by SPMFundessentials and has achieved the Diploma in Fundraising Management. In 2010 he was made a Fellow of the Institute of Fundraising. Today he manages a team of 20 fundraising consultants around the UK.

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