Can an individual claim back tax on gift aid donations for themselves

shelovestobuystuff

Just a query about gift aid and how the tax rebate on donations work.
I volunteer for a charity and my manager mentioned something about gift aid recently which I thought was a bit odd,I just wanted to check if it was true.
Apparantly once the donated items have been sold and gift aid forms submitted to the tax man by the charity,the person who donated the goods can actually claim back the tax rebate for themselves.Manager says the goods have been sold by the charity as agents acting on behalf of the individual only.
She says that it rarely happens and most people allow their tax rebate to go to the chairty,but some claim the tax back for themselves.
Is this true?As far as I can see via tax website only higher rate taxpayers can claim back the difference between standard and higher rate tax on gift aided donations.Can standard rate taxpayers claim back the value of gift aided donations for themselves too?

Gertie_Walker

Yes, you are right, only higher rate taxpayers can reclaim the difference between higher and basic rate tax paid on donations. People who dont pay tax would have to pay the basic rate tax to HMRC to cover the refund paid to the charity.

shelovestobuystuff

But does anyone know if standard rate tax payers can also claim the tax rebate for themselves instead of it going to the charity via gift aid?
I know that a standard rate tax payer can claim a personal tax rebate on charitable donations made but do goods donated to a charity shop count or is it just cash donations which a person can claim tax rebate on for themselves?

Gertie_Walker

Sorry, I thought my answer clearly stated you couldnt.

shelovestobuystuff

Okay,looks like my manager doesnt know how gift aid works then,thought it sounded odd.Thanks.

Just found this paragraph on direct gov site,looks like this must be what the manager was meaning.
Records of goods sold by a charity on your behalf

If a charity sells goods on your behalf and you donate the sale proceeds to them, you can make the donation using Gift Aid.
The charity will usually write to you to tell you the sale proceeds of your goods.
For example, a charity shop must contact you after selling goods, to give you the option of keeping all or part of the proceeds. You should keep this paperwork.
You might have to pay Capital Gains Tax if you make a profit from the sale. Capital Gains Tax is a tax on the gain or profit you make when you sell or give away something that you own, such as property. You’ll need to keep records so that you can declare the capital gain.
If you give the goods directly to a charity instead of asking the charity to sell them on your behalf, you will not have to pay Capital Gains Tax.

• Introduction to Capital Gains Tax

ipswich448

There are two types of tax relief for gifts to charity, gift aid is (fairly) well known, you give 80p to a charity, that is deemed to have been paid out of net income, so HMRC adds 20p, gross value of gift £1. If you are a 40% taxpayer, you can get another 20p back (£1 @ 40% less 20%).

The point is, you have to have paid the 20p tax in the first place, if you’re a non-taxpayer, HMRC can (and do) come after you for the difference between the tax they’ve paid to the charity less the tax you’ve paid to them.

The second type of giving is where you give an asset to a charity, as many wealthy people do, such as paintings, antiques etc. In this situation, the value of the gift, is declared gross on your tax return, and no CGT (or IHT) is payable. A basic rate taxpayer gifting an item worth £100 to charity, will get £20 back (40% taxpayer, £40 etc).

In theory therefore, if I give my old clothes to a charity shop, I could claim gift relief, for the price at which they were sold. In practice, you can imagine what a nightmare this would be for the charity shop. In addition it is me claiming the tax back, not them, so there is no financial incentive (for the charity)to do this.

What is worth considering is claiming for items that are gifted to charity auctions, especially where you get a letter from the treasurer thanking you, and telling you how much your item sold for.