Tax relief when giving to our charity

Tax relief on donations can be such a benefit – both to our Society and to you

There is considerable benefit from tax relief on charitable donations. Some of these ways are explained here.

Tax relief when giving to us through Gift Aid

Gift Aid increases the value of your donations to the Sailors’ Society by allowing us to reclaim basic rate tax on your gift. If you pay higher rate tax you can claim extra relief on your donations. If you claim age-related allowances or tax credits, Gift Aid donations can sometimes increase your entitlement.

How Gift Aid works

The Gift Aid scheme is for gifts of money by individuals who pay UK tax. Gift Aid donations are regarded as having basic rate tax deducted by the donor. We receive your donation - which is money you've already paid tax on - and reclaim basic rate tax from HM Revenue & Customs (HMRC) on its 'gross' equivalent - the amount before basic rate tax was deducted.

Basic rate tax is currently 20 per cent, so this means that if you give £10 using Gift Aid, it's worth £12.50 to our charity.

Tax relief when giving to us as a business

Donating money to our charity via your company can be a very tax efficient way of supporting our cause. Any business can get tax relief when they give money to charity, whether it is a “one off” payment or a regular Gift Aid Scheme.

Donation Limits

There is no limit to the amount of charitable donations that a business can give, although the mechanics of obtaining tax relief differs, depending on whether you are operating via a limited company, as a sole trader, or a partnership.

Limited Company Rules

The majority of businesses trade via a limited company and the simplest method of donating to us is therefore through the Gift Aid Scheme. The amounts paid to our charity are dealt with as a “charge” when working out company profits for corporation tax purposes. Your company makes the full payment to our charity. No deductions are made for tax from the payment and our charity does not claim back any tax on the gift.

Sponsorship payments

Your company may choose to sponsor a charitable activity and can claim relief for any sponsorship payments made to us, provided the payments are made wholly and exclusively for the purposes of your trade and are not of a capital nature. Qualifying sponsorship payments are deducted from trading profits for corporation tax purposes and not treated as a “charge” as above in the case of charitable donations.

No relief is available for sponsorship payments unless the “wholly and exclusively” test is met.