Anyone supporting Aspire, who is a taxpayer, and who donates €250 or more in a year, will be able to either

(a) allow the Charity to reclaim that tax, or
(b) if you are self employed or corporate donors they will be able to claim it back yourself.

 Aspire is asking those people who can make their total contributions in a year reach €250 (€20.83 a month) to try and do so. As a supporter of Aspire, your donation of €250 or more in the year could be worth up to 72% more to us, and our work with those with AS in Ireland.The examples below show what a real difference that could make to the value of your donation. 

The Finance Act 2001 brought good news for Charities in relation to tax effective giving. From the 6th April 2001 tax relief is available on donations 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. How the tax relief is applied depends on which taxpaying category the donor falls into:

1. 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 the returned to the charity receiving the donation).
2. Individual taxpayers on self-assessment benefit directly from relief at the marginal rate by claiming the donation as a tax-deductible expense.
3. Corporate donors simply claim a deduction for the donation as if it were a trading expense.

So in the first case the tax relief is paid directly to the Charity whilst in cases two and three the donor receives the tax relief. The following examples help to illustrate how the tax relief works in practice.

Who Claims the Tax Relief

Example 1 PAYE Donor (Higher rate)

Tom is a PAYE taxpayer who donates €254 to his favourite eligible charity. His marginal rate of tax is 42%. Tom fills in a form sent to him by the charity giving details of his donation together with his PPS No. (the new name for RSI No.) The charity then uses the form to claim back the tax which Tom has already paid on this €254 directly from Revenue - €254 x 100/58 = €437 - €254 (donation) = €183 (tax associated with the donation) bringing the total value of the donation to the charity up to €437.

Example 2 PAYE Donor (Lower rate)

Teresa is a PAYE taxpayer who donates €254 to her favourite eligible charity. Her marginal rate of tax is 20%. Teresa fills in a form sent to her by the charity giving details of her donation together with her PPS No. (the new name for RSI No.) The charity then uses the form to claim back the tax which Teresa has already paid on this £200 directly from Revenue - €254 x 100/80 = €317 - €254 (donation) = €63 (tax associated with the donation) bringing the total value of the donation to the charity up to €317.

Example 3 Self-assessment Donor

Anne is self-employed and makes tax returns on a self-assessment basis. Her marginal rate of tax is also 42%. Anne makes a donation of €254 to her favourite charity over the course of the tax year by monthly standing order of €20.84. Anne receives a receipt from the charity and when she fills out her tax return she deducts the donation of €254 from her taxable income thus reducing her tax bill by €106. It is Anne who benefits directly from the tax relief in this case.

Example 4 Corporate Donor

XYZ Ltd makes a company donation of €254 to their favourite eligible charity and receives a receipt. The company can claim a deduction for the donation as if it were a trading expense. The company pays corporation tax at 20% so their corporation tax bill is reduced by €254 x 20% = €50. The company gets the benefit of the tax relief in this case.

Other points to remember

To qualify for the tax relief a donation must satisfy a number of conditions:

• It must be in the form of money.
• It must not be repayable.
• It must not confer any benefit on the donor or any person connected with the donor.
• It must not be conditional on, or associated with, any arrangement involving the acquisition of property by the charity or approved body.

What is an “Eligible Charity”?
The tax relief detailed above is only available for donations to Eligible Charities or Approved Bodies. What does this mean?

An Eligible Charity, such as Aspire, is defined by the legislation as any charity within the State, which is authorised in writing by the Revenue Commissioners for the purpose of this Scheme. In order to qualify for eligible charity status, the charitable organisation:

• must have a charitable tax exemption number or CHY No. and
• must have been in operation for at least three years since being granted the CHY No.
• must make a formal application to Revenue on the form provided Form of application to Revenue for Authorisation as an “Eligible Charity” for the purposes of Section 45, Finance Act, 2001 (donations to eligible charities).
• must meet any other conditions that Revenue may require from time to time.
  

For more information contact Shane O'Halloran, Development Coordinator for Aspire:-  

Phone No: Phone No: 01 878 0029

Aspire, Coleraine House, Carmichael Centre, Coleraine Street, Dublin 7.

Fax: 01 873 5283 - Please write Aspire on all faxes. 

Email: development@aspire-irl.org