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How to make Ukraine donations tax-efficient

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
16/03/2022

Making donations to Ukraine in the right way could provide more money to those who need it.

With the Russian invasion about to enter its third week, many people will be wondering how they can help people fleeing their homes in Ukraine.

One of the best ways to help is by donating cash through trusted charities and aid organisations, rather than donating goods. Cash can be transferred quickly to areas where it is needed, where people and aid organisations can use it to buy what is most needed.

If you want to donate money, there are a number of charities providing humanitarian relief in Ukraine. The Disasters Emergency Committee has set up the Ukraine Humanitarian Appeal.

Stefanie Tremain, a director at Blick Rothenberg, said: “A lot of people are watching the events in Ukraine with increasing concern and sadness, and many of us want to help in whatever way we can. For most, this will mean donating items such as clothes and blankets or making cash donations and there are a couple of ways to make sure your donation is maximised and reaches the right people.”

Anyone who pays tax in the UK should tick the box to make sure their donation is made under the Gift Aid scheme. If a donation is made under Gift Aid, the government will top up the value of your donation by 20%. So, if you donate £10, the charity will receive £12.50 at no further cost to you.

Tremain added: “Gift Aid works on the basis that the donor will pay at least enough UK tax (either income tax or capital gains tax) to ‘frank’ the top up amount. If you do not pay enough tax, you should not tick the Gift Aid box. If you do claim Gift Aid and then do not pay enough tax in the tax year, you will need to pay the ‘top up’ back to HMRC.

“Gift Aid is only available for UK or EU charities that meet the UK definition of a charity. If you are considering donating to a Ukrainian charity, maybe consider whether there is a UK/EU registered charity that will benefit the same cause but will maximise your donation.”

If you have recently made donations and didn’t claim Gift Aid but think you should have, you can contact the charity and ask to make the claim retrospectively.

Anyone wanting to help the people of Ukraine have been advised to beware of scammers setting up fake charity websites. Scams can be extremely convincing and could be a text or email asking for a donation, including a link that takes you to a website impersonating a genuine charity.

Whilst genuine fundraisers are using platforms such as GoFundMe, there may also be fake pages set up which you could contribute money to in error.

Tremain said: “It is important to check you are donating to genuine charities such as (among others) UNICEF, Save the Children, the Red Cross and Action Aid.

“By making sure you find the legitimate website rather than reacting to an unsolicited text or email, you can ensure your money goes to the right people who need it. Giving platforms will also have guidance on their websites on how to determine that a fundraiser is genuine so if you are unsure, just have a quick read before pressing the donate button.

“Many employers and pension providers run Payroll Giving schemes, which means you can make donations straight from your gross salary or pension. Donations made under Payroll Giving do not qualify for Gift Aid, but they do ensure that donations will be made to genuine registered charities.”