Gift Aid and tax relief

roytom2

I'm a basic rate tax payer and generally submit a self assessment. I wish to donate to a registered charity which provides the option to tick the box for Gift Aid.

If I tick the Gift Aid box I assume the charity will benefit but can I also get any tax back on this donation?

lisyloo

No, unless any of the following applies:

https://www.gov.uk/donating-to-charity/keeping-records

roytom2

lisyloo said:

No, unless any of the following applies:

https://www.gov.uk/donating-to-charity/keeping-records

So it seems only people who are higher rate tax payers can get any tax back? Is this correct?

Savvy_Sue

roytom2 said:

lisyloo said:

No, unless any of the following applies:

https://www.gov.uk/donating-to-charity/keeping-records

So it seems only people who are higher rate tax payers can get any tax back? Is this correct?

That's my understanding but I've not read lisyloo's link!

sheramber

You don't get anything back as the charity get the basic tax as well s your donation. That is the point of gift aid- to give the charity extra. HMRC give the tax deducted from you to the charity.

The charity can only benefit from basic tax relief so if you are a higher rate  you can claim relief for the additional amount between basic rate and higher rate tax deducted.

If you donate under gift aid and do not pay sufficIent tax to cover the relief the charity claim, then you will be billed by  HMRC for the shortfall. 

jimmythe1

I suggest the important thing to bear in mind is Gift Aid (the gross amount, not the amount that you give to the charity) is dealt with your SA calculation by increasing the threshold at which the basic rate (20%) and higher rate tax (40% - or 41% if you're taxed in Scotland, Tnx Nicola) cuts in. So, if/when your income rises above the higher rate threshold, you could pay slightly less tax (which a Good Samaritan could pass on to a charity).
It doesn't affect the tax you pay on bank interest or dividends.  But if you do (and exceed the zero tax allowances), you'll need to submit an SA, and keep records of any Gift Aid if you want to have the benefit. (Gov.uk link doesn;t mention that)
PS: British Heart foundation will send you a nice letter, itemising the net gift and the tax they expect to reclaim.  Maybe other charities (should) follow suit.

Sandtree

sheramber said:

If you donate under gift aid and do not pay sufficIent tax to cover the relief the charity claim, then you will be billed by  HMRC for the shortfall. 

Is that practically true? Is it all within the same tax year?

The Mrs has a few museum memberships in her name on a gift aid basis and her hobby/business swings between modest profit & losses that sits ontop of her salary thats more or less exactly tax free allowance.

Never had any bills for the years where no tax was due and really the level of information taken on gift aid is minimal and in some cases just handwritten notes on a form for smaller events etc.

Philip_P

I believe that higher rate taxpayers can avoid paying the Higher Income Child Benefit Charge by using gift aid too.