Tax calculation for gift aid

Dazed_and_confused

So, the good news is that you are paying sufficient tax to cover the gift aid donation.

Gift aiding £115/month allows the charity to claim £28.75/month in tax and you are paying over £40/month.

The bad news is that you aren't paying enough income tax on your pension income.

The £14,867 would be taxed as,

£14,867 less £11,850 Personal Allowance = £3,017
£2,000 x 19% = £380.00
£1,017 x 20% = £203.40
Total tax payable £583.40

You are only paying £510.48 (£42.54 x 12)

Although I suspect you might actually be paying more like £48.50/month in tax but without the actual split of annual State Pension (£9155?) and work pension (£5712?) amounts it's difficult to be certain.

Also do you know about the starter rate of tax for savings income which means your taxable savings interest (or some of it at least) will be taxable at a 0% tax rate?

Retired_at_55

Dazed_and_confused wrote: »

So, the good news is that you are paying sufficient tax to cover the gift aid donation.

Gift aiding £115/month allows the charity to claim £28.75/month in tax and you are paying over £40/month.

The bad news is that you aren't paying enough income tax on your pension income.

The £14,867 would be taxed as,

£14,867 less £11,850 Personal Allowance = £3,017
£2,000 x 19% = £380.00
£1,017 x 20% = £203.40
Total tax payable £583.40

You are only paying £510.48 (£42.54 x 12)

Although I suspect you might actually be paying more like £48.50/month in tax but without the actual split of annual State Pension (£9155?) and work pension (£5712?) amounts it's difficult to be certain.

Also do you know about the starter rate of tax for savings income which means your taxable savings interest (or some of it at least) will be taxable at a 0% tax rate?

Thank you very much, Dazed and confused. It is really reassuring about the Gift Aid.

This afternoon I'll be able to get all my 'papers' out to make sure I have accurate figures - and I'll post back. The main thing, for now, is that I won't have to repay Gift Aid and the charity can still benefit from it. I'll also try to copy a link to the very helpful posts regarding tax on interest from savings.

I've had so much help and have learned a huge amount from all th good people here who give their time, freely, to answer questions and help with so many, sometimes very confusing, issues. It is a terrific forum, really helpful and interesting too.

Will post back later, thanks.

Retired at 55

Dazed_and_confused

You don't need to post anything for my benefit, what I meant was do you understand the rules?

Based on the information you've provided so far you would, in the current tax year, be able to earn £2,983 in taxable interest and although this would all be taxed you would have no extra tax to actually pay

£1,983 x 0% (starter savings rate)
£1,000 x 0% (savings nil rate, known as the Personal Savings Allowance)

AnotherJoe

Anyone know if HMRC audit the tax paid and contributions or is it an "honour" system where perhaps only large amounts get looked into?

Dazed_and_confused

Anyone completing a Self Assessment return will have to pay back any excess relief as it forms part of the overall Self Assessment calculation (assuming the return is completed correctly in the first place).

For everyone else it probably depends on whether you've ever actually notified HMRC of any gift aid amounts or if large amounts are involved. Not sure any government department has resources to check everything anymore

Retired_at_55

Thannks Dazed and confused Post # 14. I'm OK about the tax on savings interest and, thanks to you, the Gift Aid. I'll check to make sure that I am paying enough PAYE tax and, if not, I'll keep money to cover any shortfall.

Thank you, again.

Retired at 55