Claiming past year's tax under Gift Aid

Milarky

On the HMRC form R40 ('Tax Repayment Form') is has a question [8.4] which askes:

Gift Aid payments made after the end of the year of claim but to be treated as if made in that year

Assuming you can contribute to a charity under GiftAid and wish to claim the value of the gift against some taxed income from the year before you make it, what do you tell the charity (if anything) at the time of donation to make this clear?

Thank you

Milarky

Anyone? (I've emailed HMRC and they are promising a reply within five days)

mrkbrrws

You don't need to tell the Charity.

The claim allows you to treat Gift Aid payments made before you submit your return as if they were made in the previous tax year. This can allow you to get the higher rate tax back earlier than would otherwise be the case. If you do not pay higher rate tax, there would be no point in making the claim.

Mr_Taxtastic

Agreed, the carry back is purely a matter of your own tax affairs and the charity do not need to know.

Gift Aid also affects Age Allowance & MCA (depending on your income) so it is not just higher rate payers that should claim.

Milarky

Thank you both - the notes for the R40 confirm this - and I should have read them first.

So '8.4' covers payments made between now ans 31 Jan 09 being effective in 2007/08 - the year I am claiming for?

What if I wanted to have the Gift Aids amounts that were actually paid in the period April 2007 to Jan 2008 to be treated as part of the previous tax year at this stage? [So that my claim for a tax refund for 2007/08 will be boosted - since there was no tax refund claimed the previous year - 2006/07 - and sufficient tax was paid to cover the charity refund?] As I see it, I could leave 'this years' (2007/08) Gift Aid amount off the R40 altogether - but then the HMRC needs to receive a separate R40 declaration in respect of 2006/07 indicating the amount paid during the 12 months after the end of that tax year.

Can you put that in an R40 for 2006/07 into effect now (can't you claim tax back for six years)? Does the restricted period of carry back (one year) mess all this up?

Thanks again

mrkbrrws

What if I wanted to have the Gift Aids amounts that were actually paid in the period April 2007 to Jan 2008 to be treated as part of the previous tax year at this stage?

The time limit for making this claim has expired, as it was 31 January 2008.

Milarky

mrkbrrws wrote: »

The time limit for making this claim has expired, as it was 31 January 2008.

Thanks again. So you either have know how much you will give to charity in the next nine months or you wait until nearly nine months into the next tax year before you make a claim for a refund of taxes?

Mr_Taxtastic

Ok its late and its been a long day but I would say it like this:

If you made donations in 2007/08 you put these on your 2007/08 tax return or R40. You can elect to carry back any gift aid made between 6/04/08 to 31/01/09 as having occurred in 2007/08 even though they were made in 2008/09 and claim this on your 2007/08 return.

This way a person knows what there income is for the year and can make a donation based on knowing the saving.

So yes you are to late to make a carry back of 2007/08 donations to 2006/07.

Milarky

Mr_Taxtastic wrote: »

If you made donations in 2007/08 you put these on your 2007/08 tax return or R40. You can elect to carry back any gift aid made between 6/04/08 to 31/01/09 as having occurred in 2007/08 even though they were made in 2008/09 and claim this on your 2007/08 return.

This way a person knows what their income is for the year and can make a donation based on knowing the saving.

Thank you. Clearly explained.

As a footnote, I got my tax refund calculation back today - and it doesn't mention Gift Aid at all! I would have thought that if you put GA down on the R40 they would include that. I have a sneeking suspicion that another arm of HMRC will be writing to me some months after I cash their cheque....:p

Mr_Taxtastic

I do not deal with many R40s but I would say if the gift claim was made on the R40 it should be on the calculation HMRC send you. It will either be as an extension to the basic rate band or an increase in your personal allowance (depending on if you a HR tax payer or BR tax payer with age allowance).

Personally I would expect the gift aid to appear on the calculation in some way if HMRC have processed the form correctly.