Under the 2001 Finance Act, a Corporate tax relief scheme is in place for companies that make donations to eligible charities. A company donation greater than €250, with no upper limit, to Special Needs Active Parents can qualify for tax relief at the current rate of corporation tax. The company will claim a deduction for the donation as if it were a trading expense.
Nature of Relief
The qualifying donation will be treated as a deductible trading expense or as an expense of management deductible in computing the total profits of the company. Tax relief will be granted at the company’s marginal rate of tax.
Company X donates €5,000 to Special Needs Active Parents. Assuming a corporation tax rate of 32%, relief to the company is €1,600 i.e. €5,000 @32%. While the charity has the benefit of €5,000 the cost to the company of making the donation is only €3,400 (5,000 – 1,600). The normal obligations regarding the keeping of records apply.
See further down for New Tax Relief on Donations to S.N.A.P.
Making a will is an important event in your life and you have to ensure you do it properly. When you make your will, you should consult your solicitor and talk through what you would like in your will. It is a good idea to list the questions you want answered as well as your instructions regarding your money and possessions. You should also decide on how you want your estate divided, as well as your choice of executors. Remember you can change your will at any time. There are many reasons why you may decide to do this (births, death, separation). The cost of making a will is around €60. Your legacy to SNAP will continue to live after many of us are long gone.
New tax relief on donations to SNAP means that we can now make your generosity go further. Donations of €250, and over, allow us to benefit from Tax Relief that increases the value of your donation, at no extra cost to you. The Tax Relief applies in any one tax year, so your donation may be made in installments. a form telling SNAP what their RSI number is and what tax rate applies to them. Please call SNAP on 042 9333025 to receive your tax relief form for completion.
Alternatively, self-employed individuals and companies who donate to SNAP can also avail of tax relief on their donation. Please call SNAP on 042 9333025 to receive your tax relief form for completion. A receipt from SNAP may be used to support their tax claim.
Tax Efficient Giving
Anyone making a donation to Special Needs Active Parents (SNAP) who is a taxpayer and who donated €250 or more in a year will be able to either:
i) allow the charity to reclaim that tax
ii) if you are self employed or a corporate donor – you will be able to claim back the tax yourself.
From 6th April 2001 tax relief was made available on donation of €250 or more in any one-tax year to eligible charities from both individual and corporate donors. Tax relief is applied to these donations at the donor’s marginal rate of tax.
A) In the case of PAYE taxpayers, the tax relief is applied at the marginal rate and is paid directly by the Revenue Commissioners to the Eligible Charity or Approved Body on receipt of the relevant ” appropriate certificate” (an official form that is supplied by the charity, completed by the donor and returned to the charity receiving the donation).
EXAMPLE PAYE Donor (Higher Rate)
Michael is a PAYE taxpayer who donated €254 to SNAP. His marginal rate of tax is 42%. As Michael has already paid tax, his donation is made from his net income. Michael completes the “appropriate certificate” supplied to him by SNAP giving details of his donation and PPS number and returns it to us. SNAP when uses the form to claim back the tax which Michael has already paid on the €254 from the Revenue. Therefore €254 is 58% of what Michael earned. €254 x 100/58 = €437 (Gross earnings). €437 – €254 = €183 (already paid in tax to the revenue) €183 is what SNAP can reclaim back from the revenue. The value of Michael’s donation then increase to €437.00 ( €254 + €183)
B) Individual taxpayers on self-assessment benefit directly from relief at the marginal rate by claiming the donation as a tax-deductible expense.
EXAMPLE: Mary is self-employed and makes her returns on a self assessment basis. Her marginal rate of tax is 42%. Mary donates €254 to SNAP. Mary receives a receipt from the charity and when she completes her tax return she deducts the donation of €254 from her taxable income thus reducing her tax bill by €106.
C) Corporate donors simply claim a deduction for the donation as if it were a trading expense.
POINTS TO NOTE
To qualify for the tax relief a donation must satisfy a number of conditions:
For further information or to download relevant forms please visit www.revenue.ie
Payroll giving is a simple efficient and flexible scheme, which allows employees to give a regular contribution to SNAP. Giving through payroll giving is very simple. You just complete the attached form instructing your employer to deduct a specified amount from your pay. Your employer pays over all the money they deduct from all employees involved to SNAP on a weekly / monthly / quarterly basis. By donating each week / month through our payroll giving scheme you will make a thoughtful and lasting investment in SNAP and shows your dedication towards improving our children’s health. By making a regular donation to SNAP you can help us plan with confidence. A small sum for instance as little as €5.00 a month really does make a difference to the way that the charity can consistently support the vital work of the hospital. Giving directly from your payroll is one of most convenient ways that you can help our members. The knowledge that we have consistent income allows us to plan for the acquisition if equipment or the funding of research projects, as well as reducing administration costs.
People like you really can make a difference…
AKA “Planned Giving”
Planned giving is the term used for donating regular amounts of money to a nominated charity of your choice. Special Needs Active Parents particularly welcomes donations of this kind because they can lead to a predictable stream of income. This income can greatly assist us with financial planning. The minimum donation in any year that must be made to any one eligible charity or approved body is €250.
About Payroll Giving
Payroll Giving, also known as Give As You Earn (GAYE), is a term used to describe the charitable donations deducted from an employee’s salary. An employee authorises his/her employer to deduct regular charitable donations to Special Needs Active Parents from his/her pay.
Why is donating through Give As You Earn so beneficial?
GAYE creates a regular flow of funds for Special Needs Active Parents. The Association also benefits since the donation will be treated as having been received by the eligible charity or approved body ‘net’ of income tax.
Example: (PAYE – Only Individual)
Individual on the standard rate of tax i.e. 20% Individual donates €500 Value of donation to the eligible charity/approved body = €625 (i.e. €500 x 100/80) Tax associated with the donation (€625 – €500) = €125 Special Needs Active Parents will therefore be able to claim a repayment of €125 from Revenue at the end of the tax year. (b) Individual on the higher rate of tax i.e. 42% Individual donates €500 Value of donation to the eligible charity/approved body = €862 (i.e. €500x 100/58) Tax associated with the donation (€862 – €500) = €362 Special Needs Active Parents will therefore be able to claim a repayment of €362 from Revenue at the end of the tax year. (Note: Where sufficient tax has not been paid to cover the donation made, the refund of tax will be limited to the amount of tax actually paid by the donor). The individual PAYE – Only donor must complete an “Appropriate Certificate” a CHY 2 Cert and forward it to Special Needs Active Parents to allow us to claim the grossed up amount of tax associated with the donation.
You can make a one-off, online donation via Paypal. Click this button to enter your details.
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