Tax code and Gift Aid

nomunnofun

jem16 wrote: »

No I think ceiberman had it spot on with what I was looking for. I understand what HMRC are doing - I just wanted to make sure I had calculated it correctly.

Sorry - I think we got our wires crossed - I was trying to point ceiberman in the direction of your post 10 but perhaps not doing a good job of it =, but it seems we are all now singing of the same hymn sheet.

Withe regard to the investment income, I always remember being actively encouraged, while working for HMRC, to include a deduction for investment income in the code number to avoid the issue of an assessment - and that was thirty years ago! In the twenty years since I left the idea of paying, for example, 2013/14 higher rate tax on investment income from April 2013, when it could be paid in January 2015 has never sat well with me,

System

jem16 wrote: »

They have a good idea already from my tax return. However in previous years I preferred not to have it included as the amount varied from year to year and I preferred to have it handled via my tax return. I always made a pension payment that negated any higher rate tax liability. In the odd year it wasn't needed as i didn't creep into higher rate tax.

I guess that's one of those things with PAYE, it's not an exact science.
Assuming you're talking about your 2013-14 code it would be using figures from April 2012 (return) to guess what the income will be in 2014.

nomunnofun

I know that it is not that relevant to the thread but I was heavily involved in C,O,P, (computerisation of PAYE) in the mid -eighties, Can any of you young lot imagine what it was like to do all this cr*p manually?

jem16

nomunnofun wrote: »

Withe regard to the investment income, I always remember being actively encouraged, while working for HMRC, to include a deduction for investment income in the code number to avoid the issue of an assessment - and that was thirty years ago! In the twenty years since I left the idea of paying, for example, 2013/14 higher rate tax on investment income from April 2013, when it could be paid in January 2015 has never sat well with me,

That's why I've always asked them not to include it. I saw no reason to reduce my normal monthly income only to have them pay me back tax later when I had made a pension contribution which gave me tax relief.

I know I could also get an allowance in the tax code for a pension contribution but as it changes each year I didn't want that either.

ceiberman wrote: »

I guess that's one of those things with PAYE, it's not an exact science.
Assuming you're talking about your 2013-14 code it would be using figures from April 2012 (return) to guess what the income will be in 2014.

Yes I am talking about 2013/14 and yes they are probably using the April 12 return.

System

Glad we could get to the bottom of things between us.

zagfles

ceiberman wrote: »

It depends on the level of the income that tax code is used against. For example if you pay HR tax on that source alone, it would be (420 x 0.4) / 0.2 = 840.

That's the gross amount, so it would assume actual (net) gift aid donations of 840 x 0.8 = £672.

System

Good call Zagfles. I should have made that clear or gone the extra step.