Many of those making charity donations to the flood victims at both home and abroad may not be aware that the tax man might take a cut.

As the clean-up begins there will be hundreds of people in Carlisle and the Tyne Valley who will have no hope of restoring their homes and many whose livelihoods have been destroyed.

And there are many individuals and businesses keen to donate much needed cash to throw a lifeline to these communities.

Kendal based accountancy firm Armstrong Watson is warning people to be smart when making their donation.

Tax Consultant Graham Arnott explains: "When a donation is made under Gift Aid, a donor gives a slice of their income to a charity.

"That donation is treated as if tax has already been paid on the sum, which then allows the charity to claim that extra percentage back from the Government, thus increasing the amount they receive from a donation. So for every £1 given, the charity can reclaim an additional 28p (that being the basic rate tax of 22% on £1.28).

"But under the law as presently drafted, a donor must have paid enough tax in the year to cover the amount of tax on the gift. It follows that if a donor has not paid any tax that year, or not enough to equal the tax on the gift, they should not sign a Gift Aid declaration, because if the charity reclaims tax which has not been paid, the Inland Revenue may decide to recover that tax from the donor."

"Non tax payers may end up paying the price for wanting to help others," Graham says. "If you don't pay tax such as OAPs or anyone unemployed - and you make a Gift Aid payment the charity can claim back the tax, but then the Inland Revenue will then demand the additional funds to cover this tax payment to the charity from the donor.

The best way to avoid making two payments to the charity is to just make a simple donation in cash rather than using the Gift Aid scheme.

Information supplied by Armstrong Watson.