Donating to charity

An individual or sole trader who pays tax may donate money to a charity under gift aid. This means that the charity can then claim back the basic rate tax paid on that money hence increasing their funds.

Donating to Charity

If the person donating the money is a higher rate tax payer then they can claim back the higher rate tax paid via their personal tax return.

A company on the other hand can not donate using gift aid but claims the full tax relief through their accounts. So if the company is paying, then remember to add the tax to your donation as you get all the tax relief and the charity does not get any direct.

Neither a company nor an individual can get the tax relief if not paying any tax e.g. if the business has made losses.

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