Do you want to make charitable donations before you complete your tax return?

Giving to charity under Gift Aid can result in a win/win for both the donor and the charity.

If your total income is above the higher rate threshold (£42,385 for 2015/16), making a Gift Aid donation will reduce your tax bill for the year in which the donation is made. However, you can shift the tax benefit of that gift back one year if the gift precedes the date when you file your tax return for the earlier tax year. This can be useful if your marginal tax rate is higher in the earlier tax year than in the later year.

Say you make a Gift Aid donation on 1 December 2015. If you submit your 2014/15 tax return after that date (it's due by 31 January 2016) you can include a claim in that return to carry back the donation made on 1 December 2015 to reduce your 2014/15 tax liability.

Gift Aid can reduce your income used to calculate the clawback of child benefit (income over £50,000) and the reduction in personal allowances (income over £100,000). It can also increase your higher rate threshold used to determine how much of a capital gain is taxed at 18% or 28%.

To make a valid Gift Aid donation, you must declare that you will pay sufficient tax to cover 25% of the value of your gift in the year the gift is made. If you give £80 under Gift Aid, you must pay Income Tax and/or Capital Gains Tax of at least £20. The 10% dividend tax credit counts towards the total tax paid.

The dividend tax credit will be abolished on 5 April 2016, so you may need other sources of tax to cover any Gift Aid donations made after that date.