Q: I wanted to know the most tax efficient way of giving to charity. As I took a low director's salary last year, I am not paying any income tax, and thefore the charity cannot reclaim gift aid on my personal donations. Is there a way that I can give out of the business and gift aid that?
A: In a sense. You can effectively give the same amount to the charity and be no worse off, after tax. Gifts to a charity made by the company are paid gross, and so the gift is effectively worth less to the charity than a gift made from personal income. However in most cases the gift can be deducted from taxable profits - provided you keep a record of the donation. The charity should receive roughly the same as a gift aid payment if you gift them your corporation tax saving as well.