Donations to the British Friends are deductible against UK tax whether or not the donor is a British national providing that person pays UK taxes under the Gift Aid Scheme. The only requirement is that that donor pays sufficient UK tax, either income tax or capital gains tax, to cover the tax on all his or her donations to UK charities under that Scheme and that the donor gives the appropriate certificate if using the Gift Aid Scheme. Dual UK/US tax payers can receive a double deduction if they channel their donation through the Charities Aid Foundation American Donor Fund. As a British registered charity, the British Friends can also accept donations from other charities. Please note that only personal donations are eligible for gift aid treatment, donations from companies are not.
The English Charity Commissioners have agreed that UK residents paying UK tax can make gifts for the benefit of Harvard Business School through the British Friends for appropriate educational purposes and claim UK tax relief on their donations. UK taxpayers wishing to donate to the School will considerably enhance their donations by making them through the British Friends.
All donations to the British Friends Scholarship Fund will count towards section and class reunion fundraising and annual lists of donations at HBS whether donations stay with the Scholarship Fund or are transferred to HBS for appropriate educational purposes.
The chart below illustrates the tax efficiency of giving through the British Friends for a UK tax payer:
|Donor gives to charity||Net benefit to charity||Tax gain to charity||Tax benefit to donor||Tax gain||Net cost to donor|
|Without tax relief||£1,000||£1,000||£NIL||£NIL||£NIL||£1,000|
|40% tax payer with tax relief||£1,000||£1,250||£250||£250||£500||£750|
|45% taxpayer with tax relief||£1,000||£1,250||£250||£312||£562||£688|
Where an individual who is paying tax at 40% makes a donation of £1,000, the British Friends reclaims tax from HM Revenue & Customs of £250 so that the charity receives £1,250; £1,000 from the donor and £250 from the Revenue. In addition, the donor can currently obtain tax relief on his/her self assessment of £250 (20% of £1,250), reducing the net cost to £750.
For a 45% taxpayer, the grossed up equivalent of a net payment of £1,000 remains at £1,250, but his or her tax relief increases to £312 (25% of £1,250), reducing the net cost to £688. The charity can continue to claim £250.