Gift aid and not paying enough tax

jamei305

What happens to gift aid donations if, upon completing your tax return, it transpires that you haven't paid enough tax i.e. donations are more than 4 times what you pay in tax?



Is the 25% clawed back from your tax return calculation, with the charities none the wiser, or is it claimed back directly from the charities by HMRC?


HMRC just state that "You must tell the charities you support if you stop paying enough tax." but that doesn't seem realistic e.g. "Dear Wakefield Cathedral, You know I visited 18 months ago and signed a gift aid declaration for the £10 entrance fee, well it turns out the £2.50 you consequently claimed from HMRC shouldn't really have been claimed because I later had to replace the boiler on a flat I rent out so yeah, good luck with that".

BoGoF

HMRC will recover the money from you.

sheramber

You are charged the tax.

https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-3-gift-aid

scroll down to 3.5

Keep_pedalling

You can ask the charity to repay, but they have no obligation to do so therefore the obligation falls to you and your tax return will trigger the claw back.

It is not practical for an individual to revisit small one off donations, but anyone in this situation is likely to be making larger one off or regular payments and you should be aware that you risk going over the top, so should be in a position to inform the charities concerned that they can no longer claim gift aid.

uknick

How would HMRC know who to ask for the tax if you don't a self assessment?

I can't recall if I always give personal details that can be used to trace me when I've ticked the gift tax box.

Keep_pedalling

uknick wrote: »

How would HMRC know who to ask for the tax if you don't a self assessment?

I can't recall if I always give personal details that can be used to trace me when I've ticked the gift tax box.

In order to claim a charity must have a gift aid declaration form from the giver, and have to maintain this record for 6 years from the last gift received. The exception to this is for cash and contactless card gifts below £20

Lotak

jamei305 wrote: »

What happens to gift aid donations if, upon completing your tax return, it transpires that you haven't paid enough tax i.e. donations are more than 4 times what you pay in tax?



Is the 25% clawed back from your tax return calculation, with the charities none the wiser, or is it claimed back directly from the charities by HMRC?


HMRC just state that "You must tell the charities you support if you stop paying enough tax." but that doesn't seem realistic e.g. "Dear Wakefield Cathedral, You know I visited 18 months ago and signed a gift aid declaration for the £10 entrance fee, well it turns out the £2.50 you consequently claimed from HMRC shouldn't really have been claimed because I later had to replace the boiler on a flat I rent out so yeah, good luck with that".

This happened to my sister some years ago.
You will have to pay them the tax you gift aided.

If you do not pay tax (or pay enough tax), my advice is not to gift aid as HMRC will recover it from you.