What's Happening?
Guernsey residents are being encouraged to take advantage of a tax relief system that allows their charitable donations to be 'grossed up' for tax purposes. This system enables charities to claim back the tax paid on donations of £500 or more, effectively
increasing the donation amount without additional cost to the donor. For instance, a £500 donation can be increased to £625, providing an extra £125 to the charity. The Association of Guernsey Charities (AGC) has noted a decline in the amount of tax relief claimed by charities, dropping from £427,144 in 2019 to £290,578 in 2023. To counter this, the maximum qualifying donation will rise from £7,500 to £10,000 per person per year starting January, allowing a £10,000 gift to be treated as £12,500. This change aims to encourage more donations and maximize funding for charities.
Why It's Important?
The tax relief system is crucial for charities in Guernsey, especially as they face rising costs and increased demand for services. By maximizing the potential of donations through tax relief, charities can secure additional funding without placing extra financial burden on donors. This system not only benefits the charities but also incentivizes donors to contribute more, knowing their donations will have a greater impact. The increase in the maximum qualifying donation is expected to further enhance the financial support available to charities, helping them to continue their vital work in the community.
