Gift aid - no taxes paid to cover?

howryoo

I just wish to double check the rules on gift aid here.

I no longer have employment income, but for the tax year 2021-22 I still have savings interest (around 5 times less than previous years!) to declare through self assessment.  I'm under the PSA threshold, but I've not been advised by HMRC to discontinue self-assessment.

I've also donated to a couple of charities which I've declared gift aid on in the past.  Do I have to inform the charities to stop claiming gift aid from HMRC, or could I legally leave everything as is as long as I am happy to pay the small difference on my SA return (seeing I don't / wouldn't have paid any tax)?

Side note - the interest is so low that I'm worried I may have missed something out, but I don't think I have.  Anyone else get that feeling?

Jeremy535897

You should tell the charities concerned that you are not entitled to claim gift aid. You can pay the tax under self assessment, and will have to for past donations, but that is really for people who think they qualify but find out later that they didn't.

howryoo

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

Dazed_and_C0nfused

A Self Assessment return is to report the facts.  After the event.

If you only have income from savings interest then to be able to use the savings nil rate band (aka Personal Savings Allowance) means you have must interest in excess of £17,310.

Is this the case?

If you aren't liable to pay any tax then you will be liable for the tax claimed under Gift Aid.

Jeremy535897

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

howryoo

Dazed_and_C0nfused said:

A Self Assessment return is to report the facts.  After the event.

If you only have income from savings interest then to be able to use the savings nil rate band (aka Personal Savings Allowance) means you have must interest in excess of £17,310.

Is this the case?

If you aren't liable to pay any tax then you will be liable for the tax claimed under Gift Aid.

I was a taxpayer until a year or so ago.  My only income now is interest from savings, but it's certainly not in excess of 10k+ (or anywhere near for that matter).

howryoo

Jeremy535897 said:

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

I declared gift aid on charities when I was in employment and paid taxes (at the point of donation or shortly thereafter).  Most state they'll claim the previous four years and remains in place for future donations - wasn't an issue when I was in employment.  So qualified in that regard.

When do charities claim gift aid for donations?  Immediately after the tax year (eg. 2021-22 ... in April 2022), or once everyone has filed returns for 2021-22 on 31.01.22 - so Feb 2023?  If I contacted the charity in the next few days, in relation to donations made 2021-22, will I be able to ignore for SA purposes for said tax year?

General_Grant

howryoo said:

Jeremy535897 said:

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

I declared gift aid on charities when I was in employment and paid taxes (at the point of donation or shortly thereafter).  Most state they'll claim the previous four years and remains in place for future donations - wasn't an issue when I was in employment.  So qualified in that regard.

When do charities claim gift aid for donations?  Immediately after the tax year (eg. 2021-22 ... in April 2022), or once everyone has filed returns for 2021-22 on 31.01.22 - so Feb 2023?  If I contacted the charity in the next few days, in relation to donations made 2021-22, will I be able to ignore for SA purposes for said tax year?

Charities may claim gift aid on donations multiple times in a tax year.  The charity where I am treasurer claims at least twice during each of its financial/accounting years.  The gift aid can be claimed at any point after you have made the donation.  

So you should tell the charity not to claim as soon as you believe you will not have paid enough tax during the tax year in which you make a donation.

howryoo

General_Grant said:

howryoo said:

Jeremy535897 said:

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

I declared gift aid on charities when I was in employment and paid taxes (at the point of donation or shortly thereafter).  Most state they'll claim the previous four years and remains in place for future donations - wasn't an issue when I was in employment.  So qualified in that regard.

When do charities claim gift aid for donations?  Immediately after the tax year (eg. 2021-22 ... in April 2022), or once everyone has filed returns for 2021-22 on 31.01.22 - so Feb 2023?  If I contacted the charity in the next few days, in relation to donations made 2021-22, will I be able to ignore for SA purposes for said tax year?

Charities may claim gift aid on donations multiple times in a tax year.  The charity where I am treasurer claims at least twice during each of its financial/accounting years.  The gift aid can be claimed at any point after you have made the donation.  

So you should tell the charity not to claim as soon as you believe you will not have paid enough tax during the tax year in which you make a donation.

Thanks - I thought this may be the case.

Would you know whether it's fine for me to continue as I am if I'm happy to pay the extra the charity will have claimed under gift aid, or I absolutely need to advise the charity I'm no longer a taxpayer?

Dazed_and_C0nfused

howryoo said:

General_Grant said:

howryoo said:

Jeremy535897 said:

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

I declared gift aid on charities when I was in employment and paid taxes (at the point of donation or shortly thereafter).  Most state they'll claim the previous four years and remains in place for future donations - wasn't an issue when I was in employment.  So qualified in that regard.

When do charities claim gift aid for donations?  Immediately after the tax year (eg. 2021-22 ... in April 2022), or once everyone has filed returns for 2021-22 on 31.01.22 - so Feb 2023?  If I contacted the charity in the next few days, in relation to donations made 2021-22, will I be able to ignore for SA purposes for said tax year?

Charities may claim gift aid on donations multiple times in a tax year.  The charity where I am treasurer claims at least twice during each of its financial/accounting years.  The gift aid can be claimed at any point after you have made the donation.  

So you should tell the charity not to claim as soon as you believe you will not have paid enough tax during the tax year in which you make a donation.

Thanks - I thought this may be the case.

Would you know whether it's fine for me to continue as I am if I'm happy to pay the extra the charity will have claimed under gift aid, or I absolutely need to advise the charity I'm no longer a taxpayer?

Providing you're happy to pay the tax them I don't think you have to change anything.

howryoo

Dazed_and_C0nfused said:

howryoo said:

General_Grant said:

howryoo said:

Jeremy535897 said:

howryoo said:

Interesting.

So I'm not able to leave it if I'm happy to pay 25% more through SA?

No, because you are supposed to tell the charity that you qualify for gift aid as a taxpayer at the point you make the donation, and if you don't qualify, you cannot say that you do. If you want to ensure that the charity does not lose, gross up the gift for the tax they would have reclaimed. You will be no worse off as you won't have to pay over the tax. It may even remove the need for you to complete a self assessment tax return, if you don't owe any tax.

I declared gift aid on charities when I was in employment and paid taxes (at the point of donation or shortly thereafter).  Most state they'll claim the previous four years and remains in place for future donations - wasn't an issue when I was in employment.  So qualified in that regard.

When do charities claim gift aid for donations?  Immediately after the tax year (eg. 2021-22 ... in April 2022), or once everyone has filed returns for 2021-22 on 31.01.22 - so Feb 2023?  If I contacted the charity in the next few days, in relation to donations made 2021-22, will I be able to ignore for SA purposes for said tax year?

Charities may claim gift aid on donations multiple times in a tax year.  The charity where I am treasurer claims at least twice during each of its financial/accounting years.  The gift aid can be claimed at any point after you have made the donation.  

So you should tell the charity not to claim as soon as you believe you will not have paid enough tax during the tax year in which you make a donation.

Thanks - I thought this may be the case.

Would you know whether it's fine for me to continue as I am if I'm happy to pay the extra the charity will have claimed under gift aid, or I absolutely need to advise the charity I'm no longer a taxpayer?

Providing you're happy to pay the tax them I don't think you have to change anything.

Thanks, I assumed this to be the case, so long as I need to complete SA (thus pay the extra tax).

I just wanted to clarify that it's not a legal requirement for me to stop gift aid.

So for every £1 everyone else pays (ignoring the tax they'll have pay through employment anyway), I'm paying £1.25.