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Money Moral Dilemma: Should I tell my friends I get tax relief from our combined charity donations?
Comments
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Grumpy_chap said:Savvy_Sue said:It is probably my anal tendencies which lead me to differentiate between GA and PG. I completely agree with you that whatever the process, it is contrary to taxation rules.
It would be nice to have an actual definitive rule that shows this in absolute clarity and certainty, rather than simply two people (at least one of whom is unqualified in these matters) agreeing about it on the internet.
If this is, indeed, contrary to tax rules, then the whole scenario ceases to be a MMD and should not have been put up as such.
Otherwise we might just as well have "Jim realised that if he makes a false declaration on his tax return he can pay far less tax. Should Jim do this? What do you think, readers?"And that would be two of us unqualified - other than (in my case) by experience of claiming Gift Aid on behalf of a charity, and reading up all about Payroll Giving when we started receiving such donations. But even that experience is now several years out of date.
and as I type, I realise that I hadn't even considered the gift aid small donations scheme, which came in towards the end of my time doing this kind of stuff. Although now I have considered it, it seems irrelevant. Just for completeness, I want it referenced ...
Signature removed for peace of mind0 -
IvonH said:You should fill in the gift aid relief form which means your tax goes to the charity as an extra "donation". Withholding the information and keeping the extra money is downright unethical and equates to stealing in my book.
To recap:
Several friends give OP money every month which they all agree should go to charity. OP adds to this amount, and then asks his employer to give the TOTAL amount to the chosen charity, through the Payroll Giving / Give As You Earn scheme. No Gift Aid form needed, because that TOTAL amount is deducted from OP's gross salary before Tax and NI are taken off. OP gets a small advantage from having this TOTAL sum deducted from his gross salary, but there is no indication that he is not giving any money himself.
The charity then receives DOUBLE the TOTAL amount, because the employer match funds it - ie for every £10 given by an employee, the employer gives £10. The charity CANNOT claim any Gift Aid on this money.
I do still think it's questionable behaviour, and I'm not the only one, just not in the way you suggest.Signature removed for peace of mind0 -
Whether or not to disclose your tax relief from combined charity donations to your friends depends on several factors, including the nature of your relationship with them, the context of the conversation, and your personal comfort level with discussing financial matters.Here are some considerations to help you make a decision:1. **Privacy:** Some people prefer to keep their financial matters private, and that's completely understandable. If you're uncomfortable discussing your tax relief or feel it's a private matter, you're under no obligation to share this information.2. **Transparency:** If you have an open and transparent relationship with your friends, sharing that you receive tax relief from combined charity donations might not be a big deal. It could even be seen as helpful information if the topic of taxes or charitable giving comes up in conversation.3. **Intentions:** Consider why you want to share this information. Are you trying to brag or show off? Or do you genuinely believe it could be helpful or relevant to your friends? Your intentions can influence how your friends perceive your disclosure.4. **Relevance:** Consider whether discussing tax relief fits within the context of your conversation. If you're talking about charitable giving or taxes, mentioning your tax relief might be relevant. However, if it's unrelated or feels forced, it might be best to keep the information to yourself.5. **Sensitivity:** Be mindful of how your friends might react to this information. Some people might feel uncomfortable or even envious if they're not in a position to receive similar tax benefits. Gauge your friends' reactions and proceed with sensitivity.6. **Cultural Norms:** Cultural norms and attitudes toward discussing finances can vary widely. In some cultures, talking openly about money matters is common, while in others, it's considered taboo. Consider your cultural background and the cultural norms of your friends when deciding whether to share this information.Ultimately, the decision to disclose your tax relief from combined charity donations to your friends is a personal one. Trust your instincts and consider the potential impact on your relationships before sharing this information. If in doubt, err on the side of discretion and keep the conversation focused on topics that everyone is comfortable discussing.-1
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Basically you give a deduction from your salary to charity and your employer matches it. You pay less tax because of that deduction.
That is how the system works.
However, your friends then give you a gift of money to make up for the reduction in gross income you have.
But your reduction in income is less than the amount they gift you because you do not have tax deducted from the total amount donated.If you want to be truthful with your friend then you tell them.
Your friends may not care or you may come to an agreement that keeps everybody happy.0
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