When you make a Gift Aid payment you have to state that you pay enough tax for the charity to claim back the basic rate of tax paid on the donated amount. If you pay the basic rate tax, you won't receive any tax relief.
If you're a higher rate taxpayer, you'll receive additional tax relief through your tax return. Your basic rate band is extended by the gross amount of the contribution, so that more of your income is taxed at the 20% rate band. This defers the point at which you begin to pay higher rate tax, thus giving you an extra 20% tax relief.
You can view the calculations in Step 4 of the TaxCalc Summary:
- Select Summary > TaxCalc Summary from the left-hand menu.
- Scroll down and view the information presented in Step 4.
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