40% tax payer and Gift Aid

robindunne1

If you have taxable benefits over £38,335 for this financial year please take note. This includes all remunerations - salary, company car, private health insurance etc.... Have a word with your payroll department if you are not sure.

Gift Aid payments to charities automatically receive relief at the standard rate of tax at 22%. If you earn over £38,335 you will be suffering tax at 40% - but the charity will still only receive relief at 22%. It is up to the individual to claim back the 18% difference from the HMRC. In other words you will be owed £18 for every £100 you have paid to charity. As things like this can be claimed back over the past 6 years there may be a few lucky people out there who are due a windfall. You may need to fill in a tax return to claim the money back.

Also, another point that warrants some consideration. In our household the individual that pays the highest rate of tax also pays the money to charity. The reason being that relief can be claimed at that rate.