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Reduction in value of Gift Aided donations starts
Submitted by howardlake on 21 January, 2008 - 01:43.
06/04/2008 - 01:40
As personal income tax reductions take effect today at the start of the new tax year, so too does the value of a Gift Aided donation.
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Less money
Not only will the change in tax rate mean less gift aid - it will also mean a chunk of the population has less money to give in the first place.
The rate change for many will be from 22% to 20%. Sound good?
To pay for it, the 10% tax band is scrapped (or doubled to 20% if you want to look at it that way).
So those on low income could end up paying up to almost £20 a month extra in tax.
Something not many people seem to have realised so far.
Its not just the reduced gift aid that will hit charities, its people cutting the odd direct debit here and there to reduce outgoings.
Though conversely, those with higher incomes will have reduced tax payments so perhaps more able to give money. Subject to all the other bills that are going up (fuel and gas/lecky come to mind).
Effect of tax rate change on charities
If we do not send in our charity gift aid reclaims until the new tax year, will we only get the 20% back, or can we still get the 22% if the gift was in the years up to 5.4.2008?