Vestpod - Emilie Bellet, Women and Money

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Gift-aiding away 💁💝💰

Have you ever considered running a marathon? You know, to prove a point to an annoying ex, raise money for a great cause or simply because the idea of running 42k without going into cardiac arrest is quite stirring? Kathrine Switzer was the first woman to ever run the Boston marathon in 1967, and this week, at 70 years of age, she did it again. Now that’s some retirement goals!

50 years ago, Switzer entered the Boston Marathon using only her initials, K.V. Switzer. Before the race, her coach expressed skepticism about "fragile women" being able to complete a marathon. After she proved that she could run more than the required 42km, her coach took her to Boston himself. That wasn’t the end of her struggle, though - during the race, the race director lost his temper and tried to rip her bib off her. But, defying the odds and in what has since become an iconic moment, Switzer did not let him get to her.

Much thanks to women like Switzer, women running marathons is no longer a novelty. As our very own London Marathon approaches you might even consider taking on the challenge yourself. If you’re not quite there yet (who is?), perhaps you have friends willing to take part in a bid to raise money for charity. Thanks to crowdfunding platforms like Justgiving  and GoFundMe, donating to charitable causes has never been easier. And the best bit? You can get tax relief when making donations. Tax benefits of charitable donations can, if properly understood, provide a great incentive to give. Gift Aid is also great because it means charities get extra money added to their donations at no extra cost to the donor. Here’s a quick guide to keeping your donatories - and your wallets - happy (more on gov.uk website).

 

How to make the most of Gift Aid?

  • Charities registered with HMRC can reclaim tax on a donation made by a UK taxpayer, which increases the value of the donation. This is known as the Gift Aid scheme. Charities in EU member states, as well as Norway and Iceland, now fall within the scheme, as do community amateur sports clubs (CASCs) registered with HMRC.
  • If you are a higher rate taxpayer, you can claim an additional 20% tax relief on the total donated. This will normally be done by declaring it on your Self Assessment tax return every year. For example, if you make a £1 donation, the charity gets £1.25. If the donor claims higher rate relief, the charity receives £1.25 in total for the donor’s net of 75p.
  • Gift Aid donations can sometimes increase the donor’s entitlement to claim age-related allowances or tax credits.
  • You can even donate straight from your wages or pension. Your employer has to run a Payroll giving scheme for you to be eligible to do so. The tax relief you get depends on the rate of tax you pay. To donate £1, you pay: 80p if you’re a lower rate taxpayer, 60p if you’re a higher rate taxpayer and 55p if you’re an additional rate taxpayer.
  • Tax relief also applies if you want to donate land, property or shares to charity.
  • Should you decide to leave money or possessions to charity in your will, your donation will either be taken off the value of your estate before Inheritance Tax is calculated, or it will reduce your Inheritance Tax rate - if more than 10% of your estate is left to charity.

👉 Don’t forget: keep a record of everything, because you’ll need to have evidence of your donations if you want to claim back tax. 👈