By: Candice Louw
Whether you simply have a cause which you are passionate about, or you have friends attempting some form of physical exertion in the name of charity… there is a benefit, besides the obvious one, to giving your money to a charity.
There are two ways our clients can give to charity.
(1) As an individual
The first thing to do is make sure you are making a gift aid donation. In order to make a Gift Aid donation you’ll need to make a Gift Aid declaration. The charity will normally ask you to complete a simple form – one form can cover every gift made to the same charity or CASC for whatever period you choose, and can cover gifts you have already made and/or gifts you may make in the future.
A Gift Aid declaration must include:
- your full name
- your home address
- the name of the charity
- details of your donation, and it should say that it’s a Gift Aid donation
If you make a donation from your personal bank account, you have the benefit of increasing the higher earnings threshold value, which means that you can pay yourself over the higher rate earnings threshold, by the amount of the donation, without having to incur any additional personal tax.
(2) Your limited company
If you make a donation through your limited company, the donation needs to come directly from the company bank account. You can then claim the amount of the donation as a deductible company expense, and reduce the amount of corporation tax for the period. Gift Aid does not apply to this option, and the donation must be made to a UK registered charity.
So remember to keep the proof of the charity donation, remember to claim this in your personal tax return (for individuals) or record as a company expense (for companies), and everyone wins!