Do the rich get richer by donating to charity?

lostinrates

I learned something new yesterday in a chraity shop, some things had gift aid stickers on and i asked about donating with gift aid....each item tyou donate thats gift aioded is given an indentifying sticker and they send you a letter when it sells telling you how much your giving raised. In most cases in a charity shop i would have thought the cost of postage and record keeping and letter writing and posting would negate the gift aid amount?

A._Badger

shortchanged wrote: »

Yes unfortunately the same as most things charities are now far too open to abuse.

Let's face it. Eton School has charitable status. What a farce.

I don't have a problem with a school being run as a charity, but I certainly agree about charities in general. The large ones, like Oxfam, RSPB, WWF etc are little more than pressure groups in my opinion and often very political ones.

A few years ago I did some work for a major charity (which shall remain nameless) and saw such waste and overpayment of executives that since then I have stopped giving money to any of the major charities. Instead, what I give goes to smaller organisations where you can see what is being done and, ideally, comes in the form of goods they have to use, like animal food.

That said, I consider this a stupid move by a government fast proving itself as inept and loathsome as the previous bunch of incompetent crooks.

TruckerT

zagfles wrote: »

Up front - then I get a £11.25 rebate on my tax return. Direct subsidy to me from the taxman/QUOTE]

You're joking right? - you pay £45 to take your family out for the day, and when you get home you claim £11.25 from HMRC

MSE Martin seems to have missed that one... it would surely be at the top of his list of money-saving tips...

TruckerT

kabayiri

shortchanged wrote: »

Yes unfortunately the same as most things charities are now far too open to abuse.

Let's face it. Eton School has charitable status. What a farce.

I fully agree with this.

If you ask members of the public what they envisage is a charity, and then show them some of the organisations which have 'charity status' they would be shocked.

It's just another angle to be worked, like the tax avoidance schemes.

Everyone wants to pull a fast one nowadays. It's depressing frankly.

zagfles

TruckerT wrote: »

zagfles wrote: »

Up front - then I get a £11.25 rebate on my tax return. Direct subsidy to me from the taxman

You're joking right? - you pay £45 to take your family out for the day, and when you get home you claim £11.25 from HMRC

It's no joke. You clearly don't understand how these things work. I save my gift-aid receipts for the tax year and add them up when doing my tax return, and put the total in the relevant box on the tax return. Usually adds up to a few hundred pounds, including gift-aid sponsorships via just-giving when friends do race for life and the like.

See this link:

http://www.hmrc.gov.uk/charities/gift_aid/basics.htm

MSE Martin seems to have missed that one... it would surely be at the top of his list of money-saving tips...

TruckerT

Erm, it is:

http://www.moneysavingexpert.com/family/pay-less-give-more-to-charity

Charities reclaim the tax at the basic 20% rate, which due to the way the numbers work means they get 25% more than you donate (e.g. you give £50, the charity gets £62.50).
Any higher rate (40%) or additional rate (50%) taxpayers are able to reclaim the difference between the basic and higher rates (i.e. 20 or 30%) on top of this.
For higher-rate taxpayers, on £50 that's another £12.50 (so £25 in total). However, the tax self-assessment form does also include a note of charity gifts so higher rate taxpayers can choose to donate this extra tax to charity too.
To claim that cash, either declare it on your tax return, or if you don't fill one out, complete a P810 form, available from your local tax office.

TruckerT

zagfles wrote: »

TruckerT wrote: »

It's no joke - just-giving when friends do race for life and the like

Do your friends understand how much they are contributing to your tax position?

TruckerT

chewmylegoff

TruckerT wrote: »

zagfles wrote: »

Do your friends understand how much they are contributing to your tax position?

TruckerT

What's your point trucker? Are you saying that people should deliberately pay more tax than they legally owe?

zagfles

chewmylegoff wrote: »

What's your point trucker? Are you saying that people should deliberately pay more tax than they legally owe?

I think he's just narked because his OP was based on a complete misunderstanding of how charitable donations work.

In any case AIUI there's no choice about it - if you fill in a tax return then you have to declare all your gift-aid contributions, otherwise you're signing an incorrect return and could theoretically be prosecuted. In reality this is highly unlikely as in most cases it either reduces tax or has no effect. But if you gave gift-aid declarations and then ended up not paying enough tax to cover them, then you have to pay the tax the charity reclaimed back!

TruckerT

The giftaid scheme does not really contradict my original point, which was that you cannot get richer by donating to charity

Clearly, the fact that higher rate taxpayers can get a subsidy on their leisure activities is an anomaly which should be removed - it is not clear that individual admission fees are eligible for gift-aid - it is possibly arguable that by giving their gift-aided members free admission to their sites, charities are going against the spirit of the rules - this is the fine line between tax avoidance and tax evasion which the government claims to wish to clarify

Other tax-relief schemes, which have not been discussed, are investment opportunities from which the wealthy 'donors' stand to make huge gains

TruckerT

SailorSam

Nobody seems to have mentioned that not only can these donations be made without it costing a lot to the individual philanthropist 'cos of the tax relief, they can in fact profit by the publicity they receive as a do gooder. I know someone who gave away over £100k on the Secret Millionaire but thought it worthwhile 'cos of the news exposure his company got.