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If you want to claim tax relief for donations to charity, you need to keep records of your donations. This will help you claim the correct amount of tax relief and pay the right amount of tax.
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You need to keep records so that you can claim the right amount of tax relief on your gifts to charity. For example, you can get tax relief on gifts of land or shares to charity, or some Gift Aid donations.
You'll also need a record of Gift Aid donations if you apply for certain income related benefits (such as tax credits) or if you get the age-related Personal Allowance, Married Couple’s Allowance or Blind Person's Allowance.
You should keep records of Gift Aid donations each year showing the date, the amount and the charities or CASCs involved.
If you're a higher rate tax payer you'll be able to claim back some tax based on the value of your Gift Aid donation.
If you get the age-related allowances or claim tax credits your entitlement may increase. This is because HM Revenue & Customs (HMRC) subtracts the amount you donate plus the basic rate tax from your total income. HMRC then uses this reduced income figure to work out the value of your allowances or tax credits entitlement.
In any of the above cases you may be asked to provide evidence of your donations.
You can claim Income Tax relief equal to the net value (the value after all tax deductions have been made) of the land, buildings or shares you give to a charity, or sell to a charity at less than their market value.
You should keep records of these donations or sales so that you can claim the correct amount of tax relief.
You get the Income Tax relief for the tax year in which the gift or sale was made.
If the charity asks you to sell the land or shares on their behalf you can still claim this relief, as long as you keep proper records of the gift and the charity's request.
For example, keep any correspondence in which the charity accepts your gift but asks you to sell the asset on their behalf and pass the proceeds to them.
Keep transfer documents and paperwork showing payment of the proceeds of the sale to the charity.
For details on how to claim tax relief, see section below 'Telling HMRC about your gifts to charity'.
If you have already made a gift of land or buildings you can ask for confirmation of the value at the date of transfer from the Valuation Office Agency.
If a charity sells goods on your behalf, (for example, clothes) and you donate the sale proceeds to them, you can make the donation using Gift Aid.
The charity will usually write to you to tell you the sale proceeds of your goods.
For example, a charity shop must contact you after selling your goods, to give you the option of keeping the proceeds. You should keep this paperwork.
You might have to pay Capital Gains Tax if you make a profit from the sale. Capital Gains Tax is a tax on the gain or profit you make when you sell or give away something that you own, such as property. You'll need to keep records so that you can declare the capital gain.
If you give the assets directly to a charity instead of asking the charity to sell them on your behalf, you will not be liable for Capital Gains Tax but you will not be able to Gift Aid the proceeds from the sale of the assets.
You don't need to put details of gifts made through Payroll Giving on your Self Assessment tax return or tax credits application.
This is because the figure of taxable earnings/pension (from your form P60), which is used to work out your tax or tax credits, won't include the income used to make these payments.
You should, however, keep records for your own reference.
If you normally complete a Self Assessment tax return, tell HMRC about your gifts to charity - and claim any tax relief - by completing the appropriate section on your tax return.
If you don't complete a tax return, you can give the details on form P810 Tax Review - available from your Tax Office.
If you pay tax through PAYE (Pay As You Earn) contact your Tax Office and ask them to make a change to your tax code.
If you're not running a business, you'll normally have to keep your tax records for at least 22 months from the end of the tax year to which they relate.
For example, if you gave a property to a charity in September 2008, you must keep any records relating to it until at least 31 January 2011.
If you're in business (as a sole trader or partnership) you must keep your tax records for at least five years and one month after the end of the tax year to which they relate.
For example, if you made a Gift Aid donation in October 2008 you must keep your records until at least 30 April 2014.
If HMRC makes any enquiries about your tax return you will need to keep your tax records until the enquiries are completed.
For more help you can contact the Charities Helpline.