Is Child Sponsorship Tax Deductible?
Your donation can transform a child's life
You will be able to see the difference you are making in the children lives thanks to regular correspondence with them. This epistolary relationship will bring you closer to the child and create a unique relationship. As a sponsor, you will receive updates on the child you are sponsoring.
In the UK, donations by individuals to charities offer tax relief benefits for the individual and the charity. There are two different ways to get tax relief from your child sponsorship:
- through Gift Aid
- directly from your salary – payroll
Individuals Gift Aid
With Gift Aid, both yourself and Children of the Mekong can benefit from tax relief.
- With your donation, Children of the Mekong can claim an extra 25p for every £1 you give
- Depending on your tax situation, your child sponsorship can be tax-deductible. If you pay tax above the basic rate (e.g. >20%), your donation will be tax-deductible.
If you are considered as a higher rate taxpayer (see the table below), you can claim the difference between the rate you pay and the basic rate on your donation.
| Band | Taxable income | Tax rate |
| Personal Allowance | Up to £12,500 | 0% |
| Basic rate | £12,501 to £50,000 | 20% |
| Higher rate | £50,001 to £150,000 | 40% |
| Additional rate | over £150,000 | 45% |
As an example, if you donate £336 to Children of the Mekong (£28 x 12 – a year of an individual sponsorship) – the charity will claim Gift Aid to make your donation £420. If you pay 40% tax you can claim back £84.00 (£420 x 20%).
How does Gift Aid work?
- Sponsor a child with Children of the Mekong
- Keep a record of your donation
- Claim tax back through your Self-Assessment tax return or by asking HMRC to amend your tax code.
With a Self-Assessment return, you can claim tax relief on donations from the previous tax year. You can also claim tax relief sooner if you will earn less than £50,001 in the current year, contact HMRC and ask for a P810 form.
Give directly from your salary
If your employer has a Payroll Giving Scheme, you can donate straight from your pay before your Income Tax is deducted. This means part of your contribution comes from the money you would have otherwise paid to HMRC.
The tax relief is based on your tax rate. To donate £1, it costs you only:
- 80p if you’re a basic rate taxpayer
- 60p if you’re a higher rate taxpayer
- 55p if you’re an additional rate taxpayer
Conclusion
Your child sponsorship changes a child’s day-to-day life and gives him/her a real chance for a better future. Your support will offer a Southeast Asian child in need of a lifeline. By claiming Gift Aid or by donating through your employer, you can pay less tax and increase the overall donation amount to the Children of Mekong. Your child sponsorship journey will be a memorable experience that you will unlikely regret.
Find responses to most of your questions about sponsoring a child and donation in our FAQ
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