Christmas is a time for giving and sharing…

Christmas Gift

Reduce the tax you pay in January by making a charitable donation.

If you have just received your tax return or anticipate a hefty tax bill that falls due for payment on 31 January 2015, one simple way to reduce the tax is simply by making a charitable gift aid donation.If you are a higher rate taxpayer (paying tax at 40%) or additional rate taxpayer (paying tax at 45/50%) you could make a gift aid donation between now (current year 2014/15) and 31 January 2015 (before the tax return is filed). This donation can then be carried back and offset against the tax return for the year ended 5 April 2014 (2013/14) and reduce the tax liability. If you do make a gift aid donation between now and 31 January 2015, this must be claimed on the tax return for the year ended 5 April 2014 (2013/14) before the tax return is filed. One key point to remember is that you must have paid enough tax in that year to cover the basic rate tax both on the gifts for that year and on the gifts carried back.