Adding Value to your Charitable Donations

Posted on 19th October 2017 by Streets -  What's trending?

Image to represent Adding Value to your Charitable Donations

Gift Aid

If you are a UK taxpayer then Gift Aid is a very straightforward way of providing charities with extra cash on top of the money you give, because all gift aid donations are treated as made after deduction of basic rate tax which the charity can claim back. So for each £1 you donate the charity can reclaim an additional 25p - and if you are a higher or additional rate taxpayer you can claim additional tax relief yourself. So if you are a 40% tax payer and make a gift aid donation of £100 to charity the result is the charity has £125, but the net cost to you after tax relief is just £75. If you are an additional rate tax payer the net cost would be £68.75.

It is also possible to claim tax relief sooner by claiming for donations made in the current year in your previous year’s tax return. This is provided that you haven’t already submitted your tax return and the donations qualify for gift aid. This can be advantageous to individuals looking to reduce their tax bill sooner, or are subject to a higher rate of tax in the previous year.

Payroll Giving

Tax relief can also be gained by donating straight from your wages or pension. Check to see whether your employer or pension provider runs a scheme. If they do then donations are treated as a deduction to your income prior to the calculation of tax.

Tax Relief and Company Donations

Companies can also claim tax relief on cash donations made to charities. Reliefs are available for gifts of land and property or qualifying shares, so it is worth taking advice in advance if such transactions are being contemplated.


Legacies are also an invaluable source of funds for many charities. Charitable legacies are themselves exempt from Inheritance Tax (IHT), but additionally if you leave at least 10% of your net estate to charity the IHT rate payable on the remainder of your estate is reduced from the current 40% to 36%. This may not sound like a large reduction, however this means that if your Will presently contains a charitable legacy, then depending on the level, you could increase this to 10% (making the charity much better off) with no detriment to your other beneficiaries because it is HM Revenue & Customs that suffers the loss. This would occur where the increase in donation is offset by the fall in the tax rate. So now may be a good time to review your Will and consider how charitable legacies could be of benefit to you as well as the charities you support.

Matched Giving

Finally, tax reliefs are not the only way to maximise the benefit of your donation to charity. Certain firms and organisations offer ‘matched giving’ so that every £1 raised by or donated to a charity is matched by an extra £1, and this is something you may wish to look out for to make your donation that much more worthwhile.

If you are interested in making a donation to a charity and would like further advice on how to obtain the best value from your donation then please email

No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.


The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.

Expert insight and news straight
to your inbox

Related Articles

Budget 2024: Changes to the Non-Dom Regime and their Implications

In the wake of the Budget 2024 announcements, significant changes to the UK's non-domiciled individual (non-dom) regime are on the horizon, with scheduled implementation for 6 April 2025. However, uncertainties loom, especially considering the potential shift in political power after the next General Election. While the outlined reforms ...

How do you avoid financial forecasting that ends up with rain instead of sunshine?

Financial forecasting can often feel like the weather forecast, financial predictions not always being as rosy as planned, or in many cases, as hoped - a bit like the weather whilst sunshine is predicted rain all too often can be the outcome.  Whilst many businesses will look to ...

Working Capital Cycle

The longer the working capital cycle, the more time it takes for your business to get a robust cash flow. It’s good practice for businesses to manage their cycle by looking at each step where possible. This could be by selling stock or product quicker, collecting monies owed ...

You might also be interested in...