Don’t Lose Your Personal Allowance!

pension contributions, git aid, tax

For every £2 that your adjusted net income exceeds £100,000 the £11,850 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

The restriction applies between £100,000 and £123,700 adjusted net income. Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax free benefit in kind. These rules changed from 6 April 2017 but employer pension contributions, bicycles, and employer provided childcare would continue to be tax effective.

Charities Gift Aid Small Donations Scheme

We take the opportunity remind you of the Gift Aid Small Donations Scheme (GASDC). Under this scheme a charity or community amateur sports club (CASC) can claim top-up payments on small donations up to £20.

From 6 April 2017 charities have also been able to claim tax back on donations made using contactless technology, such as a contactless credit or debit card.

Before 6 April 2017, charities could only claim top-up payments on small cash donations. Cash donations can be in coins or notes that have been collected and banked in the UK. The charity does not need to know the identity of the donors or collect Gift Aid declarations.

GASDS claims are worked out in the same way as Gift Aid. If the basic rate of Income Tax is 20%, the charity can claim a GASDS top-up payment of £2,000 on up to £8,000 worth of small donations. This is limited to 10 times the amount that the charity receives in Gift Aid donations that tax year.