Gift Aid Query

Raging Pineapples
Raging Pineapples Registered Posts: 110 πŸŽ† 🐘 πŸŽ†
Hi Guys and Girls,

I've just started a voluntary role with a new branch of a charity, and I need to refine my understanding of Gift Aid, specifically as it relates to the giver.

As I understand it, Bob, a higher-rate taxpayer would note any gift aid transactions on his self assessment tax return. This would enable him to reclaim the balance left over, because the charity only receives the Basic Rate element.

So far as I can see, Dave, a basic-rate taxpayer, would have no need to note the gift aids on his self assessment return as there would be no outstanding balance on the transaction for him to reclaim anyway.

Is this last part correct (or the rest of it for that matter)? Or would Dave still quote the figure on his SA Tax Return?

This is important because while I wouldn't normally touch tax advice with a barge pole, a number of donators understandably want to know the implications of their gift (I've had some specific queries already along the lines of 'Do I have to note this on my tax return?' 'Do I have to keep the receipt?' etc).

Thanks in advance,

(Ps. Just Married!! Yay!!)


  • lorrydee
    lorrydee Registered Posts: 10 Regular contributor ⭐ 😼 ⭐
    Hi Chris

    The below link will give you more information on this
  • Raging Pineapples
    Raging Pineapples Registered Posts: 110 πŸŽ† 🐘 πŸŽ†
    Thanks, I'd already found that link but didn't spot the section on 'Telling HMRC about the donation'. Thanks!

    So the remit:

    You need to tell HMRC about your gift aid donations if you have an Age-Related Personal Allowance, Married Couples Allowance, or any Tax Credits; you pay Higher Rate tax; you want to backdate a donation.

    However, I can't tell the girls at the card machine to ask this, so presumably it would be reasonable to say this:

    Q: Do I have to put anything on my tax return?
    A: It would be best, yes, because it can go in your favour for things like Tax Credits and other allowances. So keep the receipt in a little drawer somewhere.

    Or can we get away with the line the RSPB use: 'Not if you are a standard rate tax payer and do not receive a tax return from HM Revenue & Customs. However, if you do receive a tax return, you must declare the information.'

    I have a feeling the latter may not be strictly accurate for someone who has a simple PAYE employment (therefore no tax return as standard) but claims Tax Credits. Or, does someone claiming Tax Credits automatically get a Return due to that fact?
  • citrus_sharp
    citrus_sharp Registered Posts: 11 Regular contributor ⭐ 😼 ⭐
    Mainly telling HMRC about your gift aid donation also allows the HMRC to give the 20% tax credit to the charity. So Bob technically donates 80%, and the Revenue then give the charity an extra 20% as Bob is donating out of taxed income (eg his wages have been taxed at 20% so charities can claim that 20% back)
  • citrus_sharp
    citrus_sharp Registered Posts: 11 Regular contributor ⭐ 😼 ⭐
    ooo meant to add that as Bob has donated out of his taxed income, he is then allowed HRT relief of the full amount claimed by the charity, which increases his Basic rate band. or in the case of someone old, it allows them to keep more of their PAA if they earn over erm 21800 for 08/09.

    Generally someone claiming Tax Credits does not receive a tax retun.

    Definately better just to say, well if you get a Tax Return, you need to stick it on there
  • Raging Pineapples
    Raging Pineapples Registered Posts: 110 πŸŽ† 🐘 πŸŽ†
    Great, thanks!

    But failing to put it on your return doesn't actually stop HMRC from giving the refund does it? I hope not! I think they'd have noticed by now if half the refund was being withheld for that reason though, and told us to advise people on the subject... ?
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