Q: As a higher rate taxpayer – I can reclaim some of my Zakah back from HMRC – How do I treat this?
I am a higher rate taxpayer and would claim gift aid on my zakāh “donation”.
If I give £100, the charity will be able to claim another £28 or so. Fine. My donation was £100 not £128. But, I get to reclaim £20 or so from the taxman. So in reality my wealth has only gone down £80 for my donation.
Have I paid £100 or £80 to my zakāh?
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: It is as if you have paid £100 zakāh.
The £20 reclaimed from the tax man is considered a gift and will not detract from the £100 you have paid.