WITH Comic Relief having taken place last week, people’s thoughts may be tuned to charitable giving.

So what are the best ways to go about it?

First, be aware that things like cards and merchandise often give a much reduced amount of the several pounds you’ll pay to the organisations they pledge to support.

It would be more beneficial to work out how much you can afford to spare and donate directly where possible – this also eliminates some of the administration charges that may be deducted from donation websites.

Also make sure you opt in to Gift Aid.

It enables the charity to claim back the tax normally paid on donations made by taxpayers.

It amounts to an extra 25p for every £1 given.

The Institute of Fundraising explains this in the following example: “If you give £10 to a charity and you are a basic-rate taxpayer (20 per cent), you will have paid £2.50 in tax on the gross donation.

"Charities are able to reclaim this £2.50 back from HMRC.”

Don’t forget that higher-rate taxpayers can claim a further 20 per cent of the gross donation when completing a self-assessment tax return.

Another tax-efficient way to give to charity is through Payroll Giving, which enables you to donate directly from your pay or pension.

Donations are made after your National Insurance contributions are calculated, but before income tax is deducted.

Effectively, you get tax relief on your donation immediately and at your highest rate of tax.

If you pay tax at the higher rate of 40 per cent and authorise a monthly donation of £10, that means you save £4 (40 per cent of £10).

The actual cost of the donation to you is £6.

These numbers could be quite significant over a year if you can afford to give more.

Another option is to consider gifting shares to charity.

The tax treatment of this is that you can claim income tax relief on the value of the gifted shares at your marginal rate and if the shares are in profit there is no liability to capital gains tax when the shares are gifted.

In addition the gift will be immediately outside of your estate for inheritance tax.

Another important option to consider for charitable giving is to leave money to a good cause in your will.

According to Will Aid, the organisation that arranges will writing in exchange for donations to charity each November, doing so is of vital significance for the charity sector. It gives the example of Age UK, which receives half of its voluntary income from gifts in wills alone.

Giving to charity can be complicated but provides vital income to thousands of organisations.

Thinking it through and planning it tax efficiently both maximises the value for your chosen good causes and can be tax-efficient for you as the donor, too.

George Slack, from Brewin Dolphin’s Newcastle office, said: “It makes sound financial sense to talk to a qualified adviser if you would like to consider the most effective way to donate income or capital to charity so they can consider the most effective strategy for you.

"After all, taking some simple steps now will ensure more of your money will go to a worthy cause and not to the taxman.”

Neil McLoram is business development manager at wealth management firm Brewin Dolphin, based in Newcastle

The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin. No director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation which is subject to change.