Charity account

Not really.

You could use a normal bank account. Alternatively something like the Charities Aid Foundation's CharityCard Account may be what you are looking for. Basically, you Gift Aid your money into the account, and then ask them to pay it to the charity of your choice.

Bitstring , from the wonderful person Z said

I'd open a CAF (Charities Aid Foundation) account, and get credited with the tax on whatever you put in (i.e. 40% tax payer can donate £600, and get £1000 put in the a/c to give away). You get a CAF debit card, and chequebook, iirc .. however you can ONLY donate to registered charities from such an account, and they have minor hassle to extract their money from CAF (not quite as easy as banking a cheque). That's what I did, way back when I actually paid 40% tax (and have been giving it away ever since).

Alternative is to go the 'gift aid' route for each donation, but that is more hassle (and each charity then has to reclaim the tax from each payment).

Isn't CAF just a registered charity? I would have thought the only way now was to Gift Aid to them, in which case they get 28% extra, and if you pay higher rate tax you can use the amount of Gift Aided donations you make to lower your liability on your tax return.

I suppose you could have an old style covenant still running - but I thought they only lasted 5 years.

In article , GSV Three Minds in a Can writes

That's beneficial actually so I don't end up funding anything dodgy. Then again there are some pretty dodgy registered charities.

Goal is around 10 p.c. of income and as the tick boxes are usually about GBP20, at my last income - unusually low for me with out of pocket expenses for stuff my employer should have provided - this was over my weekly budget. Anything to keep the accounting easier and the payments regular.

CAF is a charity. You pay money (donation) into your CAF a/c, they reclaim the basic rate tax and put it into your CAF a/c when it arrives. If you are a higher rate tax payer, you claim higher rate relief on the donation to CAF on your tax form.

CAF give you a CAF "cheque book" and CAF debit card which can be used to make payments to charities & e.g. churches (which qualify for the same reliefs). I've also been able to make donations to analagous organizations (not-for-profits) in the USA via my CAF a/c. V. helpful from time to time.

IIRC, there are other organisations similar to CAF, but they do not come to mind at the moment.

NB: CAF take a 4% handling fee on each of your (grossed up) donations.

Allan No connection with CAF, other than a happy customer

Bitstring , from the wonderful person rob. said

Yes, you're quite right - you can give still them £1000 for the cost to you of £600, but it isn't quite as simple as I made out, since you do have to reclaim some of the (above basic rate) tax from the IR yourself.

They had no upper time limit, only a lower one, which was originally

Inland Revenue have now stopped processing personal deeds of covenant separately and they now just get lumped in with Gift Aid. They've also made the whole process administratively much less onerous. For instance, you (by which I mean charity treasurers) no longer need to get donors to sign a chit each year confirming how much they have donated that year.

So there is no difference to the donor bewteen giving via CAF and giving directly to charities, except that the donor need not make separate Gift Aid declarations to each of the charities to which he wishes to donate, and need not keep track of a running total for his tax form.

Indeed. The charity then has to send the "cheque" to CAF together with their registration number and bank details, and CAF will then wire the funds to the nominated account. Not too much hassle for the charity, but it will cost the price of a stamp and envelope. But it's not really an advantage for the charity to be able to leave one name off the Gift Aid claim, which they'll be making anyway. After all, once registered, they can accept Gift Aid, and it's much simpler to ask a potential donor to make a simple Gift Aid declaration than to go through the hassle of opening a CAF account. The CAF scheme is simply not (yet?) popular enough. As treasurer of my church, I make Gift Aid claims on behalf of several dozen donors, but only one donor uses CAF.

That sounds worth having, I suppose, if you do that sort of thing a lot.

So they actually take more than 5% of your cash contribution. Bloody hell! That's outrageous, for what little service they provide. I didn't know that, as I have no experience of CAF as a donor, only as a donee, and for me it does what it says on the tin. The donor gives me a "cheque" for £100, I send it off, and £100 appears in my charity's bank account a week or two later.

So presumably this handling fee is paid separately by the donor. It appears to me to be a good reason for avoiding them. No wonder people are more and more reluctant to give, when they realise at how many levels funds are creamed off the top, particularly in the case of overseas aid.

Allan Gould wrote on Thu, 21 Oct 2004

A mailing from them yesterday included details of a Tell a Friend promotion: for every friend you get to sign up through it, both of your accounts are topped up by GBP15. If anyone is thinking of opening a CAF account, it would be wasteful not to take advantage of it.

Indeed. What you do in the simple basic rate case is to earn £1000, pay £220 tax, and give the remaining £780 to charity. The charity then gets the £220 back from the taxman, thereby gaining the full £1000 you earned.

In the higher rate case, the charity is still supposed to get the full £1000 you earned, but is not involved in knowing what your tax rate is, so you must give them £780 as before to see them right. But you've already paid £400 tax and only have £600 available to give to the charity, so you have to find an extra £180 from somewhere (borrow it from the piggy-bank) to top up your "visible" donation. It is these £180 you then claim back from the taxman, to re-stock the piggy-bank. Then everyone's back where they should be: The tax man took £400 of which he gave £220 to the charity and £180 to your piggy-bank. The charity has the £1000 you earned. You have nothing more than before.

Ronald Raygun wrote: ...

It's effectively deducted from the reclaimed tax. The donor doesn't pay it explicitly - he just doesn't have quite as much to give away as he might have expected.

It's why I gave up with them. With the simpler tax forms for the charity, the handling fee was ludicrous. IIRC it had just gone up before I finally gave them the push a few years ago.

That sounds fine, so I can pay in a certain percentage of my salary/wages by standing order helping me set a budget then pay out when a charity takes my fancy and contributions can be increased by gift aid and interest. What happens then if, say I collect donations from other people say for them sponsoring me to do something for a non nominated charity, and the funds with other funds were divvied up later to different charities would the account then come under charity laws?

Ooooooooooooh: could you post any more details here? Someone told me yesterday that they might be interested in opening a CAF account and we could be £30 better off.

Allan

Sorry: I should perhaps clarify:

of each grossed donation, deductions are made:

See FAQ number 8