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Giving Tuesday: make your donation work harder

  • 30 November is Giving Tuesday, when we’re encouraged to take a break from consumerism and give something to charity.
  • Last year, among those who did tax returns, the higher people’s income was, the more likely they were to give to charity. However, those on lower incomes gave the highest proportion of their income.
  • Women were more likely to donate, and while men gave more, women gave a higher proportion of their income.
  • In the year to April 2021, charities got £1.4 billion in gift aid at the basic rate of income tax.
  • Higher rate taxpayers claiming extra gift aid through their tax return held steady at just over 1.2 million. They made £3.7 billion of donations in the year to April 2020.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown:

“As we take a break from the non-stop shop-a-thon of the last few days, Giving Tuesday offers a chance to do something more meaningful with your money. If it’s a bit of a stretch after spending so much in the sales, there are tricks to make your money go further, and some ways to give without parting with any cash right now.

Ticking the gift aid box helps the charity make more of your money. Higher and additional rate taxpayers can also use the gift aid rules to claim some of their donations back from the taxman.

But even if you can’t afford to give money right now, there are alternatives to benefit the charity without leaving you short. This includes everything from giving away a handful of shares, to charity shop donations and fundraising cashback websites. And if everything is just too stretched at the moment, you can always consider leaving a legacy for a charity in your will.”

Five great ways to give to charity

  1. Gift Aid

This gives you a bigger bang for your charity buck, because if you complete a gift aid declaration, it enables the charity to claim another 20% of your donation from the taxman.

  1. Reclaim the additional tax

If you’re a higher rate or additional rate taxpayer, gift aid only gives 20% tax relief – so you can claim the rest through your tax return. If your income changes, and you are in a lower tax band than you were last year, you can ask the taxman to treat a donation made this year as having been made the previous year, so you get more tax relief on it. This technique also helps if the amount of tax you’re paying this year is less than the gift aid you want to reclaim.

  1. Give shares

If you plan to give to charity, but you don’t want to spend more cash, you could consider giving shares to charity. This is often a sensible option when you have very small shareholdings that aren’t cost-effective to sell, because the charity can get better value for them. When you make this gift, the charities will be able to claim gift aid on it too. The other advantage is that the value of what you give away will be deducted from your income when your annual tax bill is calculated.

  1. Give without any extra cost

There are a handful of ways to give without any extra cost. You can make space for this year’s presents, by donating to charity shops. You can gift aid your donations at a number of charity shops by registering for their schemes. Alternatively, you can use a charitable giving website that works like a cashback site, but gives a proportion of your spending to charity instead of passing it on to you.

  1. Leave money in your will

If you don’t want to give right now, consider giving in the future by leaving a legacy in your will. This has two potential benefits. The first is that any money given to charity isn’t counted when your liability for inheritance tax is assessed. The other is that leaving money to charity in a will can reduce the rate of inheritance tax you pay. To qualify you have to give at least 10% of the portion of your estate that is subject to IHT to charity.

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