Gift Aid tax break helps fund future Olympic champions

Team GB’s future Olympic champions can get funding help through the Gift Aid scheme on donations made to Community Amateur Sports Clubs (CASCs) but non taxpayers should avoid Gift Aid on their donations, highlights the Low incomes Tax Reform Group (LITFG)

There are 6,800 clubs registered as CASCs however few people realise that, like registered charities, Gift Aid also applies to donations given to CASCs that have registered their status with HMRC.

Clubs can claim 20% tax relief on donations from donors who declare that they are taxpayers and want to donate under the Gift Aid scheme. This means for every £80 donated the club will receive an extra £20.

Non taxpayers should not use Gift Aid when making donations to either charities or sports clubs.

Changes made to the tax system on 6 April 2016 meant that some donors who were previously taxpayers may not be so any longer, so could become subject to an unexpected tax liability regarding Gift Aid.

Anthony Thomas, chairman of LITRG said: ‘Greater care must now be taken than in the past when making donations to charities and CASCs. This is because an increasing proportion of people are no longer paying income tax, with the personal allowance for income tax now being £11,000 for the 2016/17 tax year, and savings income potentially being tax free due to the personal savings allowance.

‘Also, changes to taxation of dividends – replacing dividend tax credits with a dividend allowance – means that people who were using that notional credit to give them eligibility for Gift Aid can no longer do so.’

People that have not paid enough tax but have made a donation under Gift Aid could be made to pay back all or part of the tax reclaimed on the donation to HMRC.

Thomas said: ‘A Gift Aid donation to a local sports club is a great way for taxpayers to support sportspeople because it gives clubs the chance to claim tax relief on the money they use to promote and provide facilities. Many of those competing in Rio might not be there were it not for the support of local clubs.’

The opening ceremony of the Olympic Games 2016 will be held on 5 August in Rio de Janeiro, Brazil. It will be live on UK TV from 11.20pm with the ceremony starting at midnight until 4am.

Amy Austin |Reporter, Accountancy Daily [2016-2019]

Amy Austin was reporter, Accountancy Daily and Accountancy magazine, published by ...

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