MGA News Spring 2004

There are 506,000,000 reasons why you should make the most of Tax-Effective giving.

£506 million.

That is how much charities claimed from the Inland Revenue last year by taking advantage of tax-effective giving. Almost 70% of the population makes a regular donation to charity, but less than a quarter do so tax-effectively. That means that charities are missing out on millions of pounds of tax relief. Tax-effective giving will mean more for our charity at no extra cost to our donors.

How does it work?

Anyone who has paid enough income tax or capital gains tax in the financial year of the donation which covers the tax amount reclaimed by MGA can use Gift Aid. For example, a donor giving £100 needs to have paid at least £28 in income tax or capital gains tax. If they have and they tell us they wish their donation (of whatever size) to be Gift Aided then, using the example of £100, MGA can claim the £28 back from the Inland Revenue, thus raising the value of a donation of £100 to £128 at no extra cost to the donor.

What about Payroll Giving?

When donors use Payroll Giving the donation comes from their salary before they are taxed, so tax relief is included in the donation at the donor's top rate of tax. So, a monthly gift of £20 will cost a basic rate taxpayer only £15.60 and a higher rate taxpayer only £12. In addition the Inland Revenue is currently adding 10% to every donation this way. So a £20 gross donation is worth £22 to MGA and only costs the giver £15.60.

Who can use Payroll Giving?

Anyone paid through PAYE or receiving a company pension where the scheme is in use within their company - Why not ask them?

MGA NEWS Spring 2004

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