Tax-effective charitable giving 'can help high earners'

High earners can cut the tax burden of the upcoming 50 per cent levy on salaries over £150,000 by carrying out tax-effective charitable giving.

This is according to the Charities Aid Foundation, which has urged such individuals to carry out charity investing by contributing through a payroll giving scheme or adding Gift Aid to their existing donations.

Head of private clients for the body Mike Packham said ’there has never been a better time to give to charity’ for those who are about to be affected by the new tax.

’For those in this bracket who regularly choose to donate to charity, their gifts will have never been more valuable,’ he remarked.

Donations made through Gift Aid means high-rate taxpayers will be able to claim back the difference between the 20 per cent and 50 per cent tax rates at the end of the financial year when completing their tax returns.

This means that, for every £100 donated by those earning over £150,000 from April 6th onwards, they will be able to reclaim £37.50 in relief.

A recent report from the Charity Commission suggested many charities may be at risk due to the cuts in public spending that will take place to bring down the UK’s budget deficit.ADNFCR-2318-ID-19696483-ADNFCR