Content
Leading article...
We can't go on like this...
General tax...
The name is Bond
Blessed are the givers
Excuses, excuses
PAYE the penalty
Silver and gold
Moving goalposts
Doctor, doctor...
Something phishy
Pension problems
Tax dot com
Unpleasant discoveries
Fair's fair (at last)
Chartered taxpayers
This year, next year
VAT...
Focus your mind
Flat rates aren't flat
Reverse the charges
Flapjack flash
Ready set ECSL
A lofty idea
Law items...
I want my lawyer
Not on my holiday
A grey area
No difference
| Gift Aid has been a great success since it was introduced in 1990 to allow tax relief for single gifts to charity. It's easy: make a gift, give your name and postcode, and the charity gets a bonus from the taxman. What could be simpler? For a basic rate taxpayer, it really is that simple - sign and forget it. You pay basic rate tax to the taxman, who hands it on to the charity. If you are pay at 40%, though, remember that you can claim more relief through self-assessment - you don't have to pay the top rate on money that you've given to charity. It's a little more complicated - you need to record what you've given so you can put it on your tax return. You give £80 to the charity, which claims back £20 (in theory - at the moment it gets a small bonus on top), and then your own tax is reduced by £20. If you happen not to be a taxpayer this year, you have to be careful. The Gift Aid declaration says that you will pay enough tax to cover the amount the taxman passes on for you - so if you give a charity £80 and sign, the charity will claim £20 from HMRC, and HMRC will expect you to be paying at least £20 in tax that year. If your income drops but you carry on making the same regular donations, this can catch you out - although it's not clear how rigorously HMRC police it, because matching up the names would be a huge exercise. They pick up some regular givers who stop paying tax, for example because they go abroad for a spell but still pay charitable covenants. If you've made Gift Aid donations, do keep a note for the tax return. And if you realise that you haven't been claiming the higher rate relief, you can go back to previous years - 2004/05 is still open until 31 January 2011. |
© Bayar Hughes & Co., 2010.