PTC Gift Aid relief question??? Ahh!!

mwatkins777
mwatkins777 Registered Posts: 2 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi, hoping someone can help. I am working though the questions in the PTC Kaplan book, got to no.39, and got stuck. The answer shows that the Peter, the employer made a Gift Aid payment for £540. Why does it extend the tax band for peter and other questions the gift aid relief is deducted as a relief for the tax computation? (as in question35) Would apprieciate any response..thanks

Comments

  • mwatkins777
    mwatkins777 Registered Posts: 2 New contributor 🐸
    Is it because Peter has trading income and something to do with having trading income/or a director that the tax band is extended rather than deduct gift aid from income?
  • Iandixom
    Iandixom Registered, Tutor Posts: 1 New contributor 🐸
    Not got access to the book I'm afraid. However in Peter's tax computation any payments he's made to charity will be eligible for further tax relief if he is a higher rate taxpayer - this is Peter as an individual.
    The treatment would be different if Peter was employed and made charitable donations from his salary. This would be treated as a deduction from income if covered under the 'payroll giving' rules. Does this help?

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