Chapter 2 - 3.7 - Donations Under the Gift Aid Scheme

Question 1

How is tax relief obtained for a BRTP?

Answer 1

• Relief is given at time of the donation by only giving 80% to the charity
• No adjustment is needed in the income tax computation as the appropriate amount of tax relief has been given at source

Question 2

How is tax relief obtained for a HRTP?

Answer 2

• 20% tax relief is granted at the time the payment is made
• A maximum of 20% extra tax relief is given by increasing the higher rate threshold by the gross amount of the gift: the total tax relief given is therefore 40%

Question 3

How is tax relief obtained for a ARTP?

Answer 3

• 20% tax relief is granted at the time the payment is made
• A maximum of 25% extra tax relief is given by increasing the higher and additional rate thresholds by the gross amount of the gift; the total tax relief given therefore is 45%

Question 4

How does Gift Aid operate?

Answer 4

• the donor gives a donation to charity and makes a Gift Aid declaration
• The amount paid to the charity is deemed to have been made net of 20% of tax
• The individual is deemed to have paid 80% of the ultimate donation