Gift Aid and Non Tax Payers

greensmoker

I have been informed by my daughter's school that I can pay voluntary contributions via Gift Aid. This way I pay 25% less. The HMRC provides the other 25%.
My question is: Can I do this at all? I earn less than £10,000 a year so pay no tax at all.
Thanks

force_ten

Making sure you’ve paid enough tax to use Gift Aid

You can use Gift Aid if the amount of Income Tax and/or Capital Gains Tax you’ve paid for the tax year in which you make your donation is at least equal to the amount of basic rate tax the charity or CASC and any other charities or CASCs you donate to will reclaim on your gift. A tax year runs from 6 April one year to 5 April the next. If you make a number of Gift Aid donations, you will need to consider the tax you’ve paid on each donation on an accumulative basis. If you don’t pay enough tax you will need to pay any shortfall in tax to HMRC.
You don’t necessarily have to be working to be paying tax. Apart from tax on income from a job or self-employment, the tax you’ve paid could include:
tax deducted at source from savings interest
tax on State Pension and/or other pensions
tax on investment or rental income (including tax credits on UK dividends)
Capital Gains Tax on gains
Other taxes such as VAT and Council tax do not qualify, nor does any non-UK tax.

That is from the HMRC website

if you dont pay tax then you cant gift aid

by ticking the gift aid box you are agreeing that you will pay enough tax in the tax year to cover the gift aid amount

force_ten

If you agree to gift aid HMRC could send you a bill for the tax liability that you run up with Gift Aid donations and then don't pay enough tax to cover the gift aid donation

purdyoaten

force_ten wrote: »

If you agree to gift aid HMRC could send you a bill for the tax liability that you run up with Gift Aid donations and then don't pay enough tax to cover the gift aid donation

The chances of HMRC becoming aware of that are minimal.

However, the op would be obliged to inform HMRC of the situation.

antonic

HMRC have ways and means of checking and they do check.

Aquamania

purdyoaten wrote: »

The chances of HMRC becoming aware of that are minimal.

That's presumably what AWT thought about Tesco

purdyoaten

antonic wrote: »

HMRC have ways and means of checking and they do check.

Indeed they do check and many are caught out! Years ago it used to be under a special assessment (S.350?).

However, having worked in charities division for a time and, of course, remembering the forms that I signed upon leaving, minimal just about covers it!;)

greensmoker

THanks for all your input.
I've clarified with the school how it works.
Basically you pay the lower rate, the HMRC pays the 25% for you and if you're a non tax payer then you get a bill at the end of the tax your for the 25% the HMRC paid on your behalf.

purdyoaten

greensmoker wrote: »

THanks for all your input.
I've clarified with the school how it works.
Basically you pay the lower rate, the HMRC pays the 25% for you and if you're a non tax payer then you get a bill at the end of the tax your for the 25% the HMRC paid on your behalf.

HMRC are supposed to check all gift aid payments made to charities and tie that in with the tax paid by all of the donors. HMRC do not have the resources to do this but do check many many charities.

Now, if they do discover that you are one of those people who have a resultant liability, you will get a bill. The onus will always have been on you to inform HMRC that you were a non-taxpayer and, accordingly, you may also liable to pay any penalties/interest that arise due to the delay in HMRC issuing a demand.

greensmoker

Yes you're right!
In my case, the school informs the HMRC of gift aid donations, so I will get a bill at the end of the year. I have confirmed this with other parents paying via Gift Aid

xylophone

Yes you're right!
In my case, the school informs the HMRC of gift aid donations, so I will get a bill at the end of the year. I have confirmed this with other parents paying via Gift Aid

It seems silly to bother "ticking the box" when you personally are not a tax payer.

Could your limited company make the donations instead?
http://www.hmrc.gov.uk/businesses/giving/companies.htm