How to Claim UK Tax Benefits on Charitable Donations
The government in the United Kingdom offers donors a compensation through tax cut to encourage charity giving in the country. The donor by giving donations to registered charities can pay less taxes overall, and the benefit can be claimed through tax returns by presenting the proof of donation making or donation collection. The process of claiming the benefit is not a difficult one; however, you must maintain and present the record of donations along with your application for tax return at the end of financial year.
Instructions
-
1
Registered Charities
First of all you should make sure that you give donations to charities that are registered with the charity department and with the home revenue and customs services. By showing the proof of the donation, you and the charity that has collected your donation can apply for and get the tax benefit. -
2
Choosing Payroll
If you are at a higher tax rate, you should choose the payroll as an alternative to gift aid to make your donation to the charity you want. This way works also better for the charity that will collect the donation, as it can claim the amount of the tax against which you have made the donation. You can also get a cut in overall payment of taxes. -
3
Maintain Record
If you have been unaware of the tax benefits through donations or ignoring to collect the receipts at the time of donations, better approach all those charities and do that now. You should get the receipts or any other form of communication that should confirm that you have made a donation to a charity and maintain that properly. -
4
Create Charity Account
The best way is to create an account with the Charity Aid Foundation. It takes the donations into account and pays taxes automatically after deductions. It is also a recognized way. -
5
Charity in Stocks
You can also donate stocks to charities and get the benefit of capital tax waiver on the tax return. This is one the most effective ways to make donations and get larger benefit. -
6
Credit Card
You can also get charity related credit card to get the same benefit. On each transaction through credit card, a percentage is deducted for the charity. However, the actual payment of donation to the charity is made by the bank, instead of you, but you get the benefit in tax return.
