If your Christmas giving includes a donation to charity, make sure you save on tax and maximise the amount the charity receives. For taxpayers, that means signing up to Gift Aid, which allows charities to claim an extra 28p from every £1 you give.
Charities miss out on hundreds of millions of pounds every year because donors fail to use the scheme. All you have to do is sign a form declaring that you are a UK taxpayer and the charity will do the rest on your behalf.
Donors in the 40p bracket who use Gift Aid can also claim back the difference between basic and higher-rate tax on their tax return. This does not work, of course, when you give to street fundraisers or put the money straight into collection boxes.
Rule number two is to consider signing up to a give-as-you-earn scheme. Doing so will help you benefit from full income tax-relief, so a £10 donation will only cost a basic-rate taxpayer £8, or a higher-rate tax-payer £6. Some workplaces may even top up employees’ donations. There’s more information at cafonline.org/giveasyouearn.
Rule number three is to look at signing up for charity cashback websites and credit cards. Cashback websites like froggybank.co.uk reward charities with money back from your spending online.
Charity credit cards, meanwhile, pay a percentage of your total spending to charities. Amex Red gives 1 per cent of spending to the Global Fund to fight AIDS, whilst the Virgin Charity Card donates 0.8 per cent to a choice of charities, which it tops up with Gift Aid.
In practice, other cards may offer more generous cashback (American Express, for example, offers 5% for the first three months with its Platinum card) so you could use them and then donate the money yourself. The charity cashback cards, however, are more convenient.