Self Assessment Return Re Charitable Gift Aid

[Clementino]

I have a query re my self assessment tax return, as the section re charitable donations is puzzling  me. 

I donated a sum of £137 to a charity ( which I agreed to gift aid being added. )HMRC calculate I have to pay £34 tax to them for this . 

 

[newmodarmy]

Are you a basic rate taxpayer? Did you earn enough to pay tax, and therefore get the gift aid added, in the year? I don't see why you would be asked to pay any tax

[Clementino]

Thanks NMA, I receive quite a lot of interesr from Building societies, and three pensions, some is taxed at 20% when all personal allowances are deducted.

[Clementino]

The £34 is just one if the items in the total tax 

[Clementino]

sorry about typing errors.

[newmodarmy]

Okay, so you are paying tax and therefore your donation should qualify for gift aid which gets added on to the amount the charity receives. There is no tax benefit to you unless you're a higher rate taxpayer and you can offset the donation against income and therefore be taxed on the equivalent bit of income at 40% not 20%.

I can't see why you're being asked to pay any tax to HMRC. Have they not said why?

 

[Clementino]

This is why I am puzzled. 

I will put it aside and double check later to make sure I have not made any errors. I agree with all the rest of their calculations.

[newmodarmy]

Is it £34.25?

[newmodarmy]

£34.25 is what the charity will  have  claimed from HMRC (25% of £137). If you've claimed allowances (eg expenses) against tax and this brings you below the threshold for basic rate tax, you'll be asked to pay back the £34.25 that you said the charity could take from HMRC

[Old_Geezer]

You'll have to ask them. Say you don't see why you owe it. Only they know what is in their mind. 

[Clementino]

It may be that the £34.00 has just been rounded down, like all the rest of the amounts in the form.

I haven't claimed any allowances  apart from the ones already deducted i.e. age allowance and personal allowance 

[Clementino]

Thanks for your help NMA

[newmodarmy]

okay. I was just wondering whether you were self employed in some way,  as I can't think why you'd be needing to do self assessement, as HMRC know about your pension income, state pension and interest

[Clementino]

I was told years ago, I should be doing a self assessment which was atraight forward until this year.

I think my old brain is tiring a bit .

The rest of the form was easy..

[Clementino]

NMA

the final calculation now shown by HMRC :

charity donation £137.00 + 25% gift aid =£171.25

rounded up to £172.00 @ 20% tax = £34.40

rounded down =£34 tax due 

[Peter Pedant]

as I can't think why you'd be needing to do self assessement, as HMRC know about your pension income, state pension and interest

er because he will get hammered if the taxman says he needs to do a tax form and he fails to.... but you really always knew that

He hasnt ( modesty I am sure) told us about ALL his income or the other 537 pages he has filled out, on a  need to know basis

All I can say is that I give to charity via giftaid regularly and a I have never seen a calculation such as Clemmz. 

Gift Aid is available to any tax payer not just a 40% - er -as eny fule kno ( Molesworth)

AND

when I said to my accountant ( yes I pay for one) that Gift aid wasnt counted anywhere he said - yeah it is in your tax code....

so I left him to it

[Peter Pedant]

oh it is a 'grossing up ' calculation - but I have never seen it for charity. Pops up in IHT on a random basis - sozza

[Clementino]

PP Thanks for your slightly crazy comment.  😉

I didn't fully understand how  gift aid was shown on a tax return until now.

I am obviously paying more tax now that interest rates on savings have increased and I am doing all the taxman's work for him, gratis . haha

[Peter Pedant]

PP Thanks for your slightly crazy comment.

god I wasnt even trying - for tax I put on a po-face.