Some organisations offer matched giving to their employees’ choice of charitable concern – it is a good way for these companies to fulfil their corporate social responsibility (CSR) goals. If your company offers matched giving please consider making St Mary’s School, Cambridge the beneficiary of your gift, enabling us to receive more than double the amount of your original contribution.
||Matched by employer
||Total gift received
Payroll Giving is a flexible scheme which allows a UK tax payer to give regularly to St Mary’s School, Cambridge on a tax free basis through their salary.
Payroll Giving donations are deducted before tax, so that each £1 you give will only cost you 80p, and if you're a higher rate tax payer it will only cost you 60p.
Payroll Giving is a valuable, long term source of revenue, helping St Mary’s School, Cambridge to budget and plan ahead more effectively. It offers a cheaper way for you to donate as it is tax free - for example, a donation of £5 per month costs the basic rate tax payer £4.
For higher rate tax payers this is the only way to pass on your 40% or 45% tax. Only 28% can be recouped via other ways of giving.
Gift Aid is the most widely used and recognised form of tax-effective giving. It accounts for approximately 90% of all tax-effective giving, enabling organisations like St Mary’s School, Cambridge to increase the value of donations through reclaimed tax.
As a UK tax payer, we can claim the tax back on your donation. By completing a Gift Aid declaration on the donation form and confirming that you have paid income and/or capital gains tax, you can increase the value of your gift by 25% at no extra cost to you.
For example, if you make a gift of £100 to St Mary’s School, Cambridge we can claim an extra £25, making the net cost of your gift £125, at no extra cost to you.
Even if you are a higher rate taxpayer, Gift Aid still only applies to the basic rate of tax (20%). However, if you pay a higher rate of income tax, you will have paid either 40% or 45%. You can therefore claim the difference on your self-assessment tax return between the basic rate of tax and your highest rate if you make a charitable donation. If you do not complete a self-assessment form, you can contact your local tax office and reclaim the tax from the donation.
You can either keep this relief or donate it back to St Mary’s School, Cambridge.
The table below illustrates the impact your gift can have if you take advantage of Gift Aid and tax-efficient giving if you are a higher rate taxpayer.
|Your gift payer
||Value with Gift aid
||Actual cost for 40% tax payer
||Actual cost for 50% tax
An alternative to giving money can be the donation of shares or securities.
This is a tax-effective way to give and can make a significant difference to your tax bill. Giving shares can actually cost you less than giving cash!
How does the tax relief work?
There are two types of tax relief that are potentially available when you give shares: Income Tax relief on the value of the shares and exemption from Capital Gains Tax. With the higher rates of income tax at 40% and 50% and capital gains tax at 18% (or 28% for higher rate tax payers), this can amount to a substantial tax break.
Tax relief will be given for the market value of the shares as a deduction from your income tax liability for the tax year in which the gift is made. Additionally, you may be liable for exemption from Capital Gains Tax on the increase on the value of the shares that you would have had to pay if you had simply sold them.
- If you pay income tax at 20%, your income tax bill would be reduced by 20% of the value of the gift.*
- If you pay income tax at 40%, your income tax bill would be reduced by 40% of the value of the gift.*
- If you pay income tax at 50% your income tax bill would be reduced by 50% of the value of the gift.*
*Other influencing factors/tax liabilities may alter these figures. You should seek professional financial advice before proceeding.
How can I donate my shares?
If you decide to donate some shares to St Mary’s School, Cambridge, the first step you should take is to contact us and tell us about your intention to do so. This will enable us to make the necessary arrangement for your gift to be received and help the transferal go as smoothly as possible.
Please contact Julie Hogg, Head of Development, on 01223 224126 to discuss donating shares.
Can I sell the shares myself and donate the proceeds to charity?
As St Mary’s School, Cambridge is a registered charity it may be possible to sell the shares and donate the money raised to the school. However, you need to be careful as to how you do this to make sure that you are still eligible for the tax relief. After taking financial advice, the best way to ensure that you will not be liable for Capital Gains Tax is to speak to us in advance about your intentions. Keep a copy of the written exchange of letters that set out the details of the gift, when it was made and that St Mary’s School, Cambridge has accepted the gift – these will serve as evidence for HMRC that the sale of the shares was not for your own financial gain.
Can any shares be donated to a charity?
All shares that are transferrable can be donated, but only publicly quoted shares qualify for tax relief. Examples of publicly quoted shares include shares listed on the London Stock Exchange or Alternative Investment Market Shares (AIM). For a full list of qualifying stock exchanges, please visit the HMRC website.
How can I claim the tax relief?
It is your responsibility to claim the tax relief and to keep a copy of the transfer form or letters relating to the donation in order to make the claim. You should claim the tax relief by completing the appropriate section of your self-assessment tax return. You must discuss all arrangements carefully with a solicitor or a financial advisor before proceeding with the sale.
You are able to donate this tax relief directly back to St Mary’s School, Cambridge through your self-assessment tax return.