Increasing Gift Aid take from higher rate taxpayers

Most charities know about and are using Gift Aid to increase their income from donations. However, there is one aspect of Gift Aid that is often overlooked and which could bring in valuable additional funds to those charities with donors who pay higher rate tax.

40% and 50% tax payers can reclaim the difference between what they have paid in tax and the Gift Aid claimed by the charity. They reclaim this by inserting details of their donations on their annual tax return. However, it is also possible for them to nominate a charity (one only) to receive this rebate, using HMRC form "SA100 Charity" in their self assessment.

Some charities are making effective use of this rule by sending donors an SA100 Charity form towards the end of the calendar year, with their charity's HMRC tax reference number already entered on it. This enables the donor very simply to assign their additional tax rebate to the charity.

You may of course know some of your higher rate tax paying donors, but not in all cases, so how do you decide who should receive a form? Again, some charities are writing to all Gift Aid donors with a form, to ensure they reach all the higher rate tax payers. The cost of this is likely to be more than offset by the additional tax reclaim.