Intelligent Giving
Since the launch of the momentum campaign in February 2008, Northern Ballet Theatre has been supported by a number of generous individuals, trusts and the business community. It is testimony to the strength of private sector giving that our project has been a success so far.
Northern Ballet Theatre is committed to engaging with all of our supporters in every way we can. On this page you can find out more about different ways to support us and make ensure that your charitable giving works for you.
Intelligent Giving…
Since the introduction of Gift Aid in 1990, major steps have been taken to improve the tax treatment of donations in this country. The cumulative effect of these changes has meant that the UK now has one of the best systems for tax-efficient giving in the world. In other words, there has never been a better time to support the arts.
- Transitional Relief
- Cash gift from lower rate tax payers
- Cash gift from higher rate taxpayers
- The 50% Tax band
- Payroll giving
- Gift of shares, land and buildings
- Legacies
- Time, energy and skills
- Useful Links
Transitional Relief
In April 2008, the basic rate of tax was lowered from 22% to 20%. As Gift Aid is based on the amount of tax paid, this change has meant that the amount of Gift Aid that charities can claim has also been reduced (although it has also meant that the amount of Gift Aid that higher rate tax payers can claim has increased). To help charities with the resulting drop in their Gift Aid claims, the Government have offered transitional relief for three years from 2008, which will effectively return Gift Aid claims to the pre-April 2008 levels.
Cash gift from lower rate tax payers
If you are a lower rate taxpayer and you make a cash donation to Northern Ballet Theatre we are able to claim the tax you pay on the income you donate. Gift Aid works on the principle that in order to have £50 in your pocket to donate to Northern Ballet Theatre, you have had to earn £64.00. The difference, £14.00 (transitional rate), is the income tax you are paying on your earnings.
For most people this tax is automatically deducted from their pay by their employer through a system called PAYE. If you are self-employed, the tax will be calculated upon completion of your tax return. Gift Aid allows Northern Ballet Theatre to claim this income tax you have (or will have) to pay on the money you have donated to them. To enable this to happen, you will need to complete a Gift Aid declaration that confirms that you are a UK taxpayer and agree to Gift Aid being claimed by the arts charity. Northern Ballet Theatre includes a gift aid declaration on all donation requests or you can have a form sent to you, just email Hannah Walker and ensure all future donations to Northern Ballet Theatre are gift aided.
Cash gift from higher rate taxpayers
If you are a higher rate taxpayer and you make a direct cash donation to Northern Ballet Theatre then you are able to claim some of the tax you have paid on that income through Gift Aid. Northern Ballet Theatre is also able to make a claim under Gift Aid.
The donation is worth more to us because we are able to claim the basic rate tax you have paid on the income you have donated. As a higher rate taxpayer, you are able to claim the difference between the lower rate tax (that Northern Ballet Theatre is claiming) and the higher rate of tax that you have actually paid.
To enable this to happen, you must first complete a Gift Aid declaration for the arts charity that confirms that you are a UK taxpayer and agree to Gift Aid being claimed by them. You then need to make your claim via your tax office. How you do this will depend on how you are paid. For further information on the steps you need to take, please visit the HMRC website www.HMRC.gov.uk.
The 50% Tax band
From April 2010, there will be a third Income Tax band of 50% for those people earning £150,000 or more. Under current plans, such people will be able to make a Gift Aid claim based on their full tax payment. This will mean that if a person earning over £150,000 makes a £500 gift, after April 2010 this gift will only cost them £312. Further information on this will be available closer to the time.
Payroll giving
Payroll giving can be one of the most tax efficient ways in which you can support the arts as you will benefit from the maximum tax break available. If you want to support Northern Ballet Theatre through your payroll, you will need to talk to your employer. They will have to engage the services of a Payroll Giving Agency to do all the administration work, deducting a small fee from your donation to cover their costs. The donation then goes from your employer to Northern Ballet Theatre via the Payroll Giving Agency. This process can take a number of months. It is worth checking whether your employer is one of the many companies who will match employee donations.
Gift of shares, land and buildings
Giving shares, land and buildings can be a very tax efficient way to support Northern Ballet Theatre. The reason for this is that you can offset the market value of the assets against your income before calculating tax. Furthermore, neither you nor Northern Ballet Theatre will be liable for any Capital Gains Tax.
There are some important caveats on the gift of shares. First, you can only give certain types of shares. Second, you have to deduct the value of any benefits you are receiving when calculating the value of your gift (although you can add the cost of transferring ownership of the shares). Third, you need to check that it wouldn't actually be better for you to sell the shares and donate the proceeds. Please contact Hannah Walker to discuss the best way to get the most from your gift.
Legacies
Leaving a legacy to Northern Ballet Theatre in your will can be a tax efficient way to help ensure that we will be able to continue our work for generations to come. Legacies are deducted from your estate before inheritance tax is calculated. Different rules apply depending on whether you are giving cash, shares, works of art, land or buildings. If you are leaving cash, then there are different provisions you can make in your will to determine whether Northern Ballet Theatre gets a set amount or a percentage of your estate.
Time, energy and skills
Although Northern Ballet Theatre needs financial support in order to continue its work, we also needs the time, energy and skills of volunteers to help undertake our work. You could be making a vital contribution by volunteering your time to take tickets, give tours or do building maintenance in our new dance centre. If you have more specialist skills, you could offer those to help on particular projects, whether it is writing a business plan, sorting out personnel issues or reviewing a legal contract. To volunteer email Hannah Walker.
Useful links
Much of this report is taken from the Arts & Business Tax Guide. For further information and guidance on charitable giving visit www.artsandbusiness.org.uk.
For advice on all tax matters visit HM Revenues and Customs website at www.hmrc.gov.uk.
Always seek professional advice for writing your will.
