You probably know that tax relief can be claimed for entry fees to certain zoos, historic buildings, etc. run by charities. However, they can only offer the gift aid option where they charge:
- 1. at least 10% more than the normal admission fee; or
- 2. the fee allows admission for at least twelve months.
In a recent statement HMRC makes it clear that gift aid cannot apply where some or all of an admission fee is refundable for any reason, e.g. if you were to pay for entrance to a zoo in advance but decide not to go. This rule applies even where you would have been entitled to your money back had you not paid via gift aid.
Paying by gift aid will save you tax only where you pay at the higher or additional rate. As an example, at half term you take your children to the local zoo for which the normal entrance fee is £50, but £55 if you pay by gift aid. As a basic rate taxpayer you’ll be £5 worse off paying by gift aid, but better off (because you can claim extra tax relief) by £8.75 or £12.18 as a higher or additional rate taxpayer respectively.