Gift Aid donations = taxman ripping off poor OAPs!

lunacosmic

I completed my mother's tax return last year and like so many others have been helping her to keep an account of donations to charity under "Gift AID", which allows the charities to reclaim your tax for the donation you made...sounds great but there is a disgusting taxman catch!

I called the inland revenue to discuss the final assessment of my mother's tax return as I was surprised to see she had to pay more tax...and they explained that for people under an income of the higher tax bands of £38-40K pa then the what the Gift Aid system did was add a tax value to the OAP's tax bill which then was "recouped" by the charity! Thus the taxman and Mr Gordon Brown are encouraging the charities to recruit donations by the poor elderly to pay more in taxes via the Gift Aid system and the hope being that the charities do recoup the money - and those that are at the poor scale of income and so would not actually be charged tax enough to be recouped are being BILLED in excess of their tax assessment to cover the potential recoupment by charities.

When you consider how much it must cost for the little churches in England to collect and mail off a reclaim of tax to the tax man and then the VAST MAJORITY OF POOR OAPS who are now being TAXED AT A HIGHER LEVEL TO PAY THE TAX MAN FOR THIS APPARENT "RECOUPMENT" IT IS A TRAVESTY BOTH FOR THE OLD, THE POOR (WHO ARE KNOWN TO GIVE THE HIGHER PERCENTAGE OF THEIR INCOME TO CHARITY THAN THE RICH) AND OF COURSE TO THE HARD STRETCHED CHARITIES WHO ARE BOLDLY TRYING TO GET AS MUCH IN AS POSSIBLE.

Shouldnt the campaigners get on board of this and show Govt up for the money grabbing unethical paperpushers they are.

CLAPTON

this doesn't make any real sense

what are you trying to say?

tyllwyd

Are you saying that the tax that your mother was due to pay wasn't enough to cover the tax that was due to be reclaimed for her gift aided charity donations? When you fill in the forms, there is something on the form to say that you have to pay enough UK income tax to cover the cost of the tax to be reclaimed. I don't know what happens if you don't - perhaps they do add the tax back onto your tax bill so that it can then be claimed by the charity. If that's what happens, it sounds as if it was your mum's mistake, not HMRC. Sounds as if she needs to contact the charities and make sure that she doesn't claim gift aid on future donations.

RayWolfe

lunacosmic wrote: »

When you consider how much it must cost for the little churches in England to collect and mail off a reclaim of tax to the tax man and then the VAST MAJORITY OF POOR OAPS who are now being TAXED AT A HIGHER LEVEL TO PAY THE TAX MAN FOR THIS APPARENT "RECOUPMENT" IT IS A TRAVESTY BOTH FOR THE OLD, THE POOR (WHO ARE KNOWN TO GIVE THE HIGHER PERCENTAGE OF THEIR INCOME TO CHARITY THAN THE RICH) AND OF COURSE TO THE HARD STRETCHED CHARITIES WHO ARE BOLDLY TRYING TO GET AS MUCH IN AS POSSIBLE.

Do want to check that this is correct and then delete it when you find out it is not true?

Tarasam

This is all wrong....... you only have to pay it back if you've signed for gift aid and you're not a taxpayer, its nothing to do with being higher rate at all.

I also suggest that the poster checks her facts

trevormax

If you donate via gift aid, the HMRC will give money to the charity (in effect, you have donated from your gross pay before any tax is deducted). They will not take money from the person donating unless they have not already paid enough tax to cover the donation.

This was a common problem I found while working at HMRC, a lot of pensioners gave money to a church or a charity but earned bellow the PA threshold. This resulted in an underpayment of tax which they had to pay. You dont have to use the gift aid scheem and to use it you must sign a declaration saying you have paid enough tax to cover the payment.

tyllwyd

Some of the charities can be quite pushy about gift aid, and they don't always think about the situation of the person they are trying to sign up.

RayWolfe

My experience is that none of them understand it and ask for the GA form to be signed by anybody!

Mikeyorks

Wholly inaccurate heading ... followed by a post that's little better. That's what happens when you post before 0600hrs!

Read the correct version here :
http://www.hmrc.gov.uk/charities/gift_aid/basics.htm

.... if there has been any 'add back' it's because the donor does not pay (enough) tax with which to underwrite the 'Gift'.