Product in exchange for charity donation

monaymadlol

Hi

I entered a mini competition whereby I received an object in return for a set donation and that money was paid directly to the person's chosen charity (a well known one).

For self assessment purposes as a sole trader, does that still count as a charity donation?

Thanks

Jeremy535897

If I take goods to a charity shop, and state I am a taxpayer, the charity shop writes to me when the goods are sold. At that point I can ask for the proceeds or donate them to the charity, and if I give the proceeds to the charity, the charity claims gift aid and I claim higher rate tax relief, if eligible.

When a customer buys those goods from a charity, that is not a donation, unless they pay over the market value, for example in a charity auction, when the excess over market value does count as a donation.

If you are buying items that are for use in your business, you should claim the market value as a deduction, and gift aid the excess over market value, which is not allowable as a trading expense.

Albermarle

If I take goods to a charity shop, and state I am a taxpayer, the charity shop writes to me when the goods are sold.

Does that actually happen in practice? The shop would have to be well organised with their administration to be able to do that.

sheramber

https://forums.moneysavingexpert.com/discussion/6662612/product-in-exchange-for-charity-donation

Do you want to claim gift aid relief as a higher rate taxpayer

Or deduct it from your trading income as an business expense?

sheramber

My local shop got me to complete a gift aid form and notified me how much they claimed once the item was sold.

elsien

https://forums.moneysavingexpert.com/discussion/comment/81949661#Comment_81949661

it does if you gift aid.

I always get a letter telling me what my donations have raised.

flaneurs_lobster

So my carrier bag of Dan Brown's finest work and old DVDs I leave outside Oxfam is actually tax deductible?

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81949661#Comment_81949661

Yes.

If you gift aid the donation, the shop has to have good records.

https://forums.moneysavingexpert.com/discussion/comment/81949712#Comment_81949712

No.

Stuff left outside while the shop is closed is fly tipping. Anything good gets taken before the shop is open. The remainder gets ruined by the weather, foxes, squirrels, pigeons and such like. The store staff (often volunteers) just get to clear up the mess and the store gets charged for the waste disposal. The worst possible outcome for the charity and disrespectful to their staff

You can only claim tax deduction if properly donated and the paperwork declaration signed. The tax effect is to widen your basic rate band.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81949712#Comment_81949712

How Woukd the charity confirm what amount they have claimed in gift aid without proof of who left them and that person having signed a gift aid declaration?

Jeremy535897

https://forums.moneysavingexpert.com/discussion/comment/81949661#Comment_81949661

Yes, if you register with them, they give you a number that you quote when you take goods in. Otherwise you can't claim higher rate relief because the gift is measured by the proceeds the shop receives.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81950541#Comment_81950541

Yes that makes sense, but some of the posts above seem to indicate that if you register your donation for gift aid, the shop will inform you how much the goods sold for and what gift aid has been claimed anyway - not related to claiming higher rate relief.

Just seems a lot of admin for the shop, and I am not convinced some of them would be that organised- especially where clothes donations are concerned - often the backs of these shops are piled high with clothes.