Speaking as data from a Halifax study revealed an increase in charitable donations over the past five years, the divisional director for tax and technical support at St James’s Place said clients could make significant savings on their tax bills by making donations.
The Halifax Giving Monitor revealed that 76 per cent of consumers are now donating the same amount or more to charities than they did before the economic downturn.
The study, which was based on interviews with 2,044 UK adults about their charitable habits, found that charitable donations have increased by an average of 23 per cent during the past three years.
“The plethora of tax benefits available to donors plays an important part in the rise in charitable giving,” argued Mr Mudd.
“For instance, the government’s introduction of a reduced rate of inheritance tax for those who leave 10 per cent or more to charity ensures that the effective rate of tax on the chargeable estate falls from 40 per cent to 36 per cent.”
Mr Mudd added that additional tax benefits could also be accrued through Gift Aid donations, payroll deduction schemes and gifts made under deeds of covenant.
David Gibson, director of Coleraine-based Gibson Financial Planning, said: “I always mention this to clients and work with their accountants to try and make savings.”