Scottish taxpayers: How to boost your charitable impact with tax relief

For those whose main home is in Scotland and are therefore Scottish taxpayers, income tax bands and rates differ from the rest of UK taxpayers. Scottish taxpayers generally have higher rates, but the good news is that this gives opportunity for greater tax relief on charitable giving and therefore more potential for giving. This article explains the opportunities using the rates which will apply in Scotland from 6 April 2024.

Potential for more giving with personal tax relief

For charities receiving gifts, the Gift Aid reclaim rate remains the same, at 25p per £1, whichever rate of income tax the donor is paying.

In terms of gifts, donors may want to  consider increasing how much they give, bearing in mind the extra tax relief for taxpayers paying more than the basic rate.

Tax reclaim for Scottish taxpayers with an income over £26,562

For those paying Scottish income tax at a rate over the basic rate (intermediate, higher, advanced and top rates as outlined below), tax can be reclaimed personally as a charitable donor. On any donations made, the first 20% income tax can be claimed back by the recipient charity as Gift Aid. Then, any income tax paid over the basic rate can be reclaimed by the donor.

This impacts those with incomes over £26,562 as the intermediate rate (21%) starts at this income level. The tax bands then increase to the top band (48% rate), which is for those with an income of £121,141 or above.

Examples of Scottish donors reclaiming Gift Aid

Example 1:

A Scottish taxpayer has an income of £60,000 and makes a charitable donation of £1,000. The recipient charity can reclaim Gift Aid of £250, making the full gift that the charity receives £1,250. The donor, being a higher rate taxpayer (42%), can reclaim the difference between the Gift Aid claimed by the charity and the additional rate of income tax, which is £275. This means the total cost of the £1,250 gift to the donor is £725.  (For comparison, a donor from elsewhere in the UK would pay 40% tax at this income level and so their £1,250 gift would cost them £750.)

Example 2:

A Scottish taxpayer with an income of £80,000 will come within the new advanced rate income tax band (45%). On a £1,000 gift, the total gift for the charity will be £1,250 (as with all tax bands). For the donor, however, the amount of tax reclaim will be £312 and therefore the £1,250 gift will cost the donor £688.

Table of Scottish income tax bands and rates for 2024/25:

Band	From  (£)	To  (£)	Rate  (%)	Tax reclaimable by donor (for every £1)
Personal allowance	0	12,570	0	n/a
Starter	12,571	14,876	19	Nil
Basic	14,877	26,561	20	Nil
Intermediate	26,562	43,662	21	1.25p
Higher	43,663	75,000	42	27.50p
Advanced	75,001	125,140	45	31.25p
Top, above	125,141		48	35.00p

Use Stewardship to boost your charitable impact with tax relief

A Stewardship Giving Account is an easy and efficient way of organising all your giving in one place. Gift Aid will boost your gift immediately at the point of donation.  The account will also help you to keep track of your giving for tax purposes, making it easier to work out what tax you can reclaim on your gifts.

For those giving more than £25,000 a year, our Donor Advised Fund is the idea choice for you to give tax-effectively in support of the causes you care about. We create a fund for you within Stewardship from which to manage donations to charities, churches and individuals in Christian ministry. Leave us to worry about the governance, administration and reporting requirements while you enjoy giving without complications.