Gift Aid contributions up, now paying more tax??

coffeeandcricket

After filing my tax return in November, I was told that my tax code was changing to a code ending with LX, and the number roughly halved, because:

• 'your Gift Aid Payments has been increased from £*,*** to £*,***
• we estimate you have underpaid £*** tax this year'

Since then I have been paying more tax out of my salary.

I was told earlier this week that my tax code will change in the financial year back to a straight L code, but with the number still below what it was before filing my tax return. 

I'm confused as to why making extra gift aid payments would result in my paying too little tax, can anyone please advise what might be going on? Have tried the HMRC chat and phone lines, several times, but no humans were available to help (I appreciate it's been a busy few months for them).

Thanks

Dazed_and_C0nfused

coffeeandcricket said:

After filing my tax return in November, I was told that my tax code was changing to a code ending with LX, and the number roughly halved, because:

• 'your Gift Aid Payments has been increased from £*,*** to £*,***
• we estimate you have underpaid £*** tax this year'

Since then I have been paying more tax out of my salary.

I was told earlier this week that my tax code will change in the financial year back to a straight L code, but with the number still below what it was before filing my tax return. 

I'm confused as to why making extra gift aid payments would result in my paying too little tax, can anyone please advise what might be going on? Have tried the HMRC chat and phone lines, several times, but no humans were available to help (I appreciate it's been a busy few months for them).

Thanks

You have either completely misunderstood something or are paying extra tax because you weren't payed Ng enough to cover the tax the charities are getting from your Gift Aid donations.

To understand what is happening you need details of the previous code and new code.  Ideally the full breakdown.

And don't forget a tax code is only ever provisional, it's not the end of the story.

S2929

I cant answer the tax code aspect, but can confirm that gifts to charity do effectively reduce overall income tax  (I believe it works but bumping up the personal allowance somewhat)

Dazed_and_C0nfused

S2929 said:

I cant answer the tax code aspect, but can confirm that gifts to charity do effectively reduce overall income tax  (I believe it works but bumping up the personal allowance somewhat)

Generally not unless you are liable above the basic rate though.

sheramber

You must pay enough tax to cover the tax claimed by the charity.

If the tax deducted from your earnings is not enough then you need to pay the extra.

If you want it checked 

How much are your annual earnings?

How much are your gift aid payments?

coffeeandcricket

Update:

Very helpful chats with Suzanne and Nathalie at HMRC clarified that there was an issue with the way I'd tried to claim for personal pension relief (i.e. I'd put the amount in the wrong box). Am double-checking details with my pension provider but think this should get it sorted