When you visit a stately home or gardens, you are likely to be asked if you want to use Gift Aid. Under this scheme, for every £1 you donate, the Government gives a further 25 to the charity.
You may have noticed though that the price lists for some attractions shows a higher price if you choose to use gift aid! Any donation to a charity can be gift-aided, but if you buy something you cannot do it through gift aid because you are receiving something in exchange. Is an entrance fee therefore a donation or a purchase? HMRC say that if the “normal” price is paid, this is a purchase and not eligible for gift aid, but if you pay at least 10% more than the “normal” price, gift aid can apply to the whole amount. Pay £10 normal price, no gift aid, but pay £11 – all gift aided and charity receives £11 + £2.75 = £13.75.
It can be cheaper if you pay tax at 40% or 45% as you can claim extra back through your tax return. Pay £11, and you have had 20% tax relief already – £13.75 less £2.75. A 40% taxpayer can get a further £2.75 reduction in their tax bill, and a 45% taxpayer can get a £3.44 reduction. So, make a list of all those gift aid payments throughout the year. Don’t forget some subscriptions such as National Trust membership can be gift-aided too.