Gift aid - no taxes paid to cover?

Albermarle

Normally with no taxable income and savings interest below £10K, you do not need to fill in a SA return.
So you will be filling one in just due to this minor gift aid issue, which could be resolved by informing the charities not to claim it for you in future. It seems a simpler way forward.

Jeremy535897

Not really. A basic rate taxpayer has to earn £1.25 to give the charity £1 from taxed income (ignoring NIC), and the charity gets 25p from HMRC so receives £1.25. You need to earn £1.25 to give the charity £1.25 as you are a non-taxpayer. You can do this the right way, by just giving the charity £1.25 outside gift aid, or the wrong way, by giving them £1 and saying you pay tax when you don't, so they claim 25p from HMRC and you then pay HMRC the 25p on self assessment.

howryoo

Thanks for further thoughts.

@Albermarle - so I could avoid completing SA return if I satisfy your points above, but guess I'll need to request with HMRC via phonecall?

@Jeremy535897 - so it's technically wrong for me to continue as I am even though I'm paying across (to HMRC) the extra the charities would have claimed from HMRC?

flower77g

worth bearing in mind also that

- if you were still paying enough tax in the tax year April 2020-2021
- a tax return for the year April 2021-2022 has an option to declare that gifts made to charity are to be treated as made in the previous tax year 

This might avoid the need to pay any further tax on your donations up to April 2022

Jeremy535897

Here is an example of guidance on the matter:
https://cesd.org.uk/faq/how-long-is-a-gift-aid-declaration-valid/

"Charities can claim Gift Aid on a single donation, donations made in the future and any donations made in the past four years. It’s valid until the donor is no longer a UK taxpayer. You must make sure that the donor’s information is accurate at the time your charity makes a Gift Aid claim, eg it’s useful to check if your donors have a new address.

It’s good practice to send new Gift Aid forms to your supporters to update your database and maximise your Gift Aid claim."

Note also that HMRC may ask the charity to repay the tax wrongly claimed, rather than ask you. It is just messy.

Jeremy535897

flower77g said:

worth bearing in mind also that

- if you were still paying enough tax in the tax year April 2020-2021
- a tax return for the year April 2021-2022 has an option to declare that gifts made to charity are to be treated as made in the previous tax year 

This might avoid the need to pay any further tax on your donations up to April 2022

You can't do this retrospectively. The claim must be made on the tax return that you are carrying back to, not from.

Albermarle

@Albermarle - so I could avoid completing SA return if I satisfy your points above, but guess I'll need to request with HMRC via phonecall?

In fact HMRC are quite keen to reduce the number of people filling in SA returns and encourage you to use your online Personal Tax account for any minor issues,

Personal tax account: sign in or set up - GOV.UK (www.gov.uk)

Check if you need to send a Self Assessment tax return - GOV.UK (www.gov.uk)