Business News - September
Gift Aid Transitional Relief
Charities are entitled to claim a tax repayment in respect of gift aid donations made by individuals. The tax repayment was 22% until 5 April 2008 being the basic rate of tax on payments made through gift aid. As you are no doubt aware the basic rate of tax was reduced to 20% from the beginning of this tax year. In order to compensate charities for this drop in income the government has introduced Gift Aid Transitional Relief which tops up the tax repayment due to the charity until 5 April 2011.
Charities who have already submitted repayment claims for 2008/09 should now receive their transitional relief entitlement as the Finance Act 2008 has recently received Royal Assent. There is no requirement for charities to make a separate claim for the payment.
HMRC have confirmed that from now on Gift Aid Transitional Relief will be paid automatically in addition to the tax repayment claimed.
Internet Link: HMRC guidance
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