He said the payment is made before tax is applied, which means a £1 donation costs 80p, 60p, and 55p for basic, higher rate, and additional rate taxpayers, respectively.
Workers still pay National Insurance, but not income tax, on their donation. This can also apply to a donor’s pension provider if they run such a facility – meaning they can also donate straight from their pension income.
Ariyawansa said although he encourages clients to give to charity, donors must ensure they have a safe stream of income beforehand.
The chartered wealth manager at Manchester-based Appleton Gerrard Private Wealth Management, said: “We actively encourage giving, regardless of religious beliefs. After a wider discussion, nearly everyone wants to give more, once they understand their finances are safe and income stream will maintain their standard of living.”
Ramadan started in March and involves Muslims fasting from dawn to dusk for around 30-days. It is also a renowned time of giving.
The Muslim Charities Forum has estimated that UK donors have given over £130mn to charity during the holy month during previous years.
James Batchelor, chartered financial planner at Leeds-based Progeny, agreed that Ramadan is a big month of donating to charity.
He added that under Islamic law, Muslims are not allowed to benefit from interest.
This is harder to avoid in the West, due to UK’s banking practices. This often means that Muslim clients give away this amount to charity.
He said: “There's no specific rule that Zakat (the obligatory 2.5 per cent of wealth that Muslims give to charity each year) has to be made during Ramadan, but it's generally believed that giving has more spiritual benefit if done during that month, so this is common.
"Muslims are forbidden to receive benefit from riba (interest), but this is harder to avoid in the West than in the Islamic world, due to how banking practices have developed over the centuries. Any such interest is therefore usually given away to charity as well as the Zakat, regardless of the time of year.”
Aamina Zafar is a freelance journalist
