Gift Aid is one of the simplest and most effective ways of giving to charity. Using Gift Aid means that for every £1 you give, the charity you are supporting will currently receive an extra 28p from the Inland Revenue.
Gift Aid makes your donation go further. It's a goverment scheme which allows charities to reclaim the basic tax rate you have already paid on any donation. For example, a £10 Gift Aid donation, is worth £12.80 to the charity – and it doesn't cost you a thing.
Donations suitable for Gift Aid
You can declare Gift Aid to donations of any amount, large or small, cash, cheque, postal order, direct debit, standing order, debit or credit card or even in a foreign currency. A single Gift Aid declaration can apply to all past donations you have made (since April 2003) and to all future donations you make.
Higher rate taxpayers can reclaim as much as £23 for themselves from the taxman for every £100 donated to charity, by including details of their Gift Aid donations on their self-assessment form.
If everyone gave tax-effectively, charities could claim an extra £900 million from the Inland Revenue each year.
Tax effective giving
There are a number of ways of ensuring that your donation to VSO is tax efficient and takes advantage of the Government's popular Gift Aid and associated programmes. These programmes mean that your gift will have the greatest possible value to the charity, usually at no direct cost to you.
All donations made to charity by UK taxpayers are eligible for Gift Aid, a simple and tax efficient way of ensuring that your donation has the greatest value to VSO. Provided you indicate that your donation is eligible, either in a written declaration or over the telephone, then VSO is able to reclaim the basic rate of income or capital gains tax already paid on your gift, increasing your donation by an extra 28p for every £1 that you give.
Furthermore, if you’re a higher rate taxpayer, then you can also reclaim the difference between the basic and higher rates of tax (currently 18 per cent) on the gross value of your gift.
To make the Gift Aid process more efficient for donor and for VSO you need only inform us once to ensure that all of your subsequent donations are eligible.
Self-assessment tax payers
From April 2004 self-assessment taxpayers are able to use the tax return form to donate to charity all or part of any repayment due to them. The donation will go direct to the chosen charity's bank account; the taxpayer can choose to Gift Aid the donation (see above) and any tax Gift Aided donations will be paid to the charity without the need for a claim.
Legacies and inheritance tax
Any financial legacies or bequests left to VSO are exempt from inheritance tax. As VSO is a registered charity, any legacies donated to it are deducted from your estate before any tax liability is calculated.