Christmas is a time for giving.

Donating to charity is not just a good thing to do; it can be very tax efficient.

Most people know that, as long as you pay enough tax on your income or capital gains, HMRC will top up your gift.

A gift of £80 for example will result in HMRC paying a further £20 to the charity.

If you are a 40% taxpayer, you will also see a £20 reduction in your tax bill at the end of the year.

If you pay tax at 45% then your tax bill will be reduced by £25 and if you pay tax at 60% - as those with income between £100,000 and £122,000 do – then there will be a £40 reduction of your tax bill.

There will also be a knock-on reduction of your payments on account if you are in Self Assessment.

Fewer people know that you can get an income tax (and capital gains tax) break if you give shares or land to a charity.

Leaving a legacy to a charity in your will can save tax too.

The legacy itself is exempt from inheritance tax but by leaving at least 10% of your estate to charity you can also potentially reduce the inheritance tax rate on the remainder from 40% to 36%.

Many people are currently in the process of finalising their tax returns for the year to 5 April 2016.

If you are one of them and you have made gifts to charity under gift aid since that date but before the date you file your return, you can treat the gifts as having been made in the 2015/16 tax year.

So if your tax bill due on 31 January 2017 is high and you have not yet filed your tax return, you could reduce it by making a gift now.

There is a trap to be wary of. Before signing a gift aid declaration, you need to be sure that you have paid enough tax to cover the top up HMRC will be required to pay.

If you haven’t paid enough, HMRC will ask you for it.

We all know that Christmas is a time for giving, but if you need an extra incentive, there is a warm feeling to be had from knowing that because of your gift to charity, HMRC has contributed too.

Paul Aplin OBE is a tax partner with A C Mole & Sons and Vice President of the Institute of Chartered Accountants in England & Wales; you can follow him on Twitter @PaulAplinOnTax.

He and fellow tax partner Amanda Gunter can be contacted on 01823 624450.