Gift Aid warning to non-tax payers

retiree2010

If you are a regular charity giver and signed up for Gift Aid when you were a tax payer, be aware that, as in my case, you retire and no longer liable to pay tax, Gift Aid continues to be claimed by those Charities and you as the donor are liable to pay that to the Inland Revenue. I was charged £99 for the last financial year!

PlutoinCapricorn

The whole system needs to be reformed.

Yes, the responsibility lies with the donor, who is supposed to notify the charity when they stop paying tax. But what if you can't remember who you gave to, or gave to a large number of charities?

The other side is people who start paying tax (e.g. students and unemployed people who get a job) and do not realise that they need to tell the charity that they are now tax payers.

Many charities do include a reminder in their mailings that you should inform them when you change your tax paying status, but this is often overlooked.

It would be wonderful to have a central database that all charities could access, but that is a fantasy at the moment.

Savvy_Sue

PlutoinCapricorn wrote: »

It would be wonderful to have a central database that all charities could access, but that is a fantasy at the moment.

Are you seriously suggesting that all charities registered for Gift Aid should be able to access a database of tax payers, so that we can check whether or not we should be claiming Gift Aid? :eek: That would freak me out, completely ... both as someone working for a charity, and as a donor!

I wonder how much longer Gift Aid will survive. With the recent changes allowing charities to claim Gift Aid on small donations, might it not be more cost effective for the govt to top up all donated income by a certain %?

But that might be a topic for DT rather than here ...

Torry_Quine

retiree2010 wrote: »

If you are a regular charity giver and signed up for Gift Aid when you were a tax payer, be aware that, as in my case, you retire and no longer liable to pay tax, Gift Aid continues to be claimed by those Charities and you as the donor are liable to pay that to the Inland Revenue. I was charged £99 for the last financial year!

Of course gift aid continued to be claimed, how on earth does a charity know your tax status!? Many pensioners still pay tax.

It was your responsibility and surely it isn't hard to realise that if you are no longer a tax payer you can't allow it to be claimed back.:o

jamesd

No need for a fancy database. Just oblige the charities to return the tax gain once it's recognised that the giver wasn't a tax payer, after the tax payer notifies HMRC to tell the charities.

It's quite unfriendly for a charity to take the money and not reimburse the tax after the change of status if they have really refused to do that.

telboyo

When you sign a gift aid form you are declaring that you have paid enough tax to cover the donation! It really does not get any easier than this!

Valli

Maybe the solution would be to have a gift aid form valid for each (tax) year only?

PlutoinCapricorn

The whole system is a pain and imposes a big administrative burden on charities, not to mention the costs of running it. The large charities have hundreds of thousands of names on their databases. Some do regularly ask donors to confirm their tax paying status, which is difficult when they have moved. Getting declarations from some donors isn't easy! There is also a duplication of effort in many cases as people sometimes give to many charities.

There are some fantasy ideal solutions, for example sending gift details direct to HMRC and they check the date and tax status as at that date and credit the charity with the gift aid if relevant. This would take years and cost billions to implement.

IainHL

PlutoinCapricorn wrote: »

The whole system is a pain and imposes a big administrative burden on charities, not to mention the costs of running it.
.
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As someone who used to be a charity treasurer I can tell you that Gift Aid is a whole lot simpler than what preceeded it (Deeds of Covenant anyone?). And the way the minimum amount of gift has decreased over the years to now cover any donation makes it a whole lot easier for the charity to administer the reclaiming of tax paid by the donor. Paticularly with the software now available to assist with the claims (yes I used to do it manually!).

PlutoinCapricorn

I do faintly remember the 4-year covenant forms, not to mention the lurid pink ones for individual large donations - £600 at first then down to £250?

Yes, the introduction of the new system in 2000 made things a lot simpler in comparison, but it is still a pain!

Some charities have talked about setting up online accounts for their donors so they can go on and change their own tax paying status, but that is another fantasy I think!

Savvy_Sue

oh yes, I remember Deeds of Covenant!!!