This really needs a MAJOR disclaimer, or else it will be another of those Care Allowances "pay us back" cases - do NOT do this if you only get benefits, or earn less than the Personal Allowance rate (£12,570 at this time) or if you pay a small amount of income tax (you need to earn four times the total donation value above the personal rate to not get caught out). Otherwise HMRC will send you a P800 asking YOU to pay 25% of the donation value (less any tax you paid). Case in point, you have no use for a sofa, and donate it to BHF. They make a very tidy £500 from it. You've gift aided the donation, as you think you're a tax payer because you pay £5 a month in income tax. Charity gets an extra £125, all good yes? No. Next year, the taxman will send you a P800 saying you owe £65. Why? Because the tax you paid (£60) doesn't meet the gift aid (£125) and so you need to reimburse the taxman the £65 overpaid to the charity (they want this back from you, not the charity). Please, be very careful if you don't pay much (or any) income tax when you hear the words "Gift Aid".
We really need to re-think the self assessment form. It's too complicated for one to fill just to claim back on money they've donated to charity. Is it done this way to discourage anyone from doing it?
Don't have to complete a self-assessment for this. You can call HMRC Income Tax line with the details of your donations and they should amend your tax code to compensate. Note applies to higher rate taxpayers only, because for basic rate taxpayers the charity receives the full amount of tax relief.
Be aware if you earn below the tax threshold though, gov.uk: "If the donor has not paid enough tax to cover the tax deducted from their Gift Aid donations, HMRC may ask the donor to pay the difference in tax".
Yeah, I'm never sure how it works there. Does VAT count, or only tax from earnings? I'd recommend anyone not working or on benefits to simply say "no" to be safe
@@puddle_puddle Anyone who does not pay at least enough Income Tax and/or Capital Gains Tax to cover the Gift Aid being claimed cannot make a Gift Aid declaration. Marital status does not come into it.
So this is just for people who pay tax on their earnings . Then if you are self employed and pay the 40% level of tax, you can claim 15% back as you donated it to charity via the gift aid ??
HMRC's example for a higher rate taxpayer: You donate £100 to charity - they claim the Gift Aid (25p for every £1 donated) to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).
@@Dewedin. Seems dodgy. The 25p gift aid in every pound is only because they also include the total tax refund as gross pay. Which is a false economy, in reality it paid no tax. So when the donator ads that final figure to their own 20% tax reduction; they repeat the error. Resulting overall in a 50% tax reclaim, when only 40% was originally paid. Is that really sustainable?
It's because a purchase or entry charge is not a donation and therefore not eligible for Gift Aid. A voluntary donation of at least 10% allows for the whole amount to become eligible for Gift Aid.
That was amazingly confusing! The larger piece of paper (representing a tranche of money) seemed to represent the amount retained by the worker after paying tax AND the amount of money the charity receives. One piece of paper, one amount of money, CANNOT be in two pockets at the same time!!! A possibly nice illustration - please do it again but with accuracy. Thank you. Agh now I won't sleep!
If you donate items to a charity shop, and are feeling particularly canny/mean, the charity has to tell you how much your items sold for...and you can ask for that money back.
But only on the amount over £50,270. I've been severely disabled all my life & from a poor family. I'll happily swap with anyone in that 40% tax bracket who feels hard done by.
DO NOT donate to charity via a company! When a company asks you (a customer or an employee) to make a charitable donation, the company donates the money in THEIR name, not yours. This allows them to then claim back that donation as a tax reduction. Allowing them to keep more profits! ALWAYS make charitable donations directly, either in your own name, or on another person’s behalf (after receiving permission to do) so. Only donate via a company if they commit to unlimited contribution matching or multiplying.
This is untrue. Please do not give advice if you don't know what you're talking about. The company does not claim your donation as a tax write-off. Or, if they did, they would also have to record your donation to them as income, which increases their tax bill, so a write-off then puts them back in the same position. This is a very common misconception - giving to charities via companies is completely fine, and if they're using it to claim as their own donation that's fraud and if they're reducing their tax bill, they're not including it in income and it's then tax evasion which is illegal.
Usually great advice from mse, but this video assumes charities are always great and taxes are always terrible. In fact its not even discussed but assumed, but its not so clear cut. There ia not enough discussion in this country about shady money bleeding charity management and great social work done through raising capital via taxes.
But gift aid is only claimable by the charity that the donor has already given to. So you as a donor are choosing which charity to enable to claim Gift Aid on YOUR donation. Surely you wouldn't donate to a charity you didn't believe in?
This really needs a MAJOR disclaimer, or else it will be another of those Care Allowances "pay us back" cases - do NOT do this if you only get benefits, or earn less than the Personal Allowance rate (£12,570 at this time) or if you pay a small amount of income tax (you need to earn four times the total donation value above the personal rate to not get caught out). Otherwise HMRC will send you a P800 asking YOU to pay 25% of the donation value (less any tax you paid).
Case in point, you have no use for a sofa, and donate it to BHF. They make a very tidy £500 from it. You've gift aided the donation, as you think you're a tax payer because you pay £5 a month in income tax. Charity gets an extra £125, all good yes? No. Next year, the taxman will send you a P800 saying you owe £65. Why? Because the tax you paid (£60) doesn't meet the gift aid (£125) and so you need to reimburse the taxman the £65 overpaid to the charity (they want this back from you, not the charity).
Please, be very careful if you don't pay much (or any) income tax when you hear the words "Gift Aid".
Loving the expensive prop used in this video haha!
We really need to re-think the self assessment form. It's too complicated for one to fill just to claim back on money they've donated to charity. Is it done this way to discourage anyone from doing it?
Don't have to complete a self-assessment for this. You can call HMRC Income Tax line with the details of your donations and they should amend your tax code to compensate. Note applies to higher rate taxpayers only, because for basic rate taxpayers the charity receives the full amount of tax relief.
Be aware if you earn below the tax threshold though, gov.uk: "If the donor has not paid enough tax to cover the tax deducted from their Gift Aid donations, HMRC may ask the donor to pay the difference in tax".
Yeah, I'm never sure how it works there. Does VAT count, or only tax from earnings?
I'd recommend anyone not working or on benefits to simply say "no" to be safe
Income and capital gains inly
And what about married couples if one is not a tax payer?
Yes, it gets messy, I have to pay extra tax to cover the Gift Aid since I retired
@@puddle_puddle Anyone who does not pay at least enough Income Tax and/or Capital Gains Tax to cover the Gift Aid being claimed cannot make a Gift Aid declaration. Marital status does not come into it.
So this is just for people who pay tax on their earnings . Then if you are self employed and pay the 40% level of tax, you can claim 15% back as you donated it to charity via the gift aid ??
So, the charity can claim it back, and then u can also get a bit of it back in your self assessment at then end of the year.
HMRC's example for a higher rate taxpayer: You donate £100 to charity - they claim the Gift Aid (25p for every £1 donated) to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).
@@Dewedin. Seems dodgy. The 25p gift aid in every pound is only because they also include the total tax refund as gross pay. Which is a false economy, in reality it paid no tax. So when the donator ads that final figure to their own 20% tax reduction; they repeat the error. Resulting overall in a 50% tax reclaim, when only 40% was originally paid. Is that really sustainable?
Why is it that some charities charge you more when they ask you to giftaid?
Who does that?
Is that just poorly communicated “we get more”?
@@JohnR31415 one example: National trust. Went to Hardwick Hall only last week. If you gift aid, then they charge a more expensive entry fee.
It's because a purchase or entry charge is not a donation and therefore not eligible for Gift Aid. A voluntary donation of at least 10% allows for the whole amount to become eligible for Gift Aid.
@@Dewedin.I always wondered about that. Thanks for that info.
This is all very well, but the money going into the government coffers is reduced, and they'll have to make it up somewhere.
I assume I can't tick yes, if unemployed and on long term severe disability benefit.
That was amazingly confusing!
The larger piece of paper (representing a tranche of money) seemed to represent the amount retained by the worker after paying tax AND the amount of money the charity receives.
One piece of paper, one amount of money, CANNOT be in two pockets at the same time!!!
A possibly nice illustration - please do it again but with accuracy.
Thank you.
Agh now I won't sleep!
If you donate items to a charity shop, and are feeling particularly canny/mean, the charity has to tell you how much your items sold for...and you can ask for that money back.
You can, but people don't tend to. Of course there are a handful, but it's about 0.01%
40% tax? OMG
But only on the amount over £50,270. I've been severely disabled all my life & from a poor family. I'll happily swap with anyone in that 40% tax bracket who feels hard done by.
DO NOT donate to charity via a company!
When a company asks you (a customer or an employee) to make a charitable donation, the company donates the money in THEIR name, not yours. This allows them to then claim back that donation as a tax reduction.
Allowing them to keep more profits!
ALWAYS make charitable donations directly, either in your own name, or on another person’s behalf (after receiving permission to do) so.
Only donate via a company if they commit to unlimited contribution matching or multiplying.
This is untrue. Please do not give advice if you don't know what you're talking about. The company does not claim your donation as a tax write-off. Or, if they did, they would also have to record your donation to them as income, which increases their tax bill, so a write-off then puts them back in the same position. This is a very common misconception - giving to charities via companies is completely fine, and if they're using it to claim as their own donation that's fraud and if they're reducing their tax bill, they're not including it in income and it's then tax evasion which is illegal.
Your hashtag is not visible- notice it on a few of your videos now... Maybe move it slightly...?
Can somebody ask the government where our money is going, CT is worked out to run the country so where is it?
I donate directly to charity from my Salary so it comes out automatically.
I’m guessing tax is sorted out somewhere
Give too Palestine and Lebanon and Yemen
Usually great advice from mse, but this video assumes charities are always great and taxes are always terrible. In fact its not even discussed but assumed, but its not so clear cut. There ia not enough discussion in this country about shady money bleeding charity management and great social work done through raising capital via taxes.
But gift aid is only claimable by the charity that the donor has already given to. So you as a donor are choosing which charity to enable to claim Gift Aid on YOUR donation. Surely you wouldn't donate to a charity you didn't believe in?
problem with charities look at how much the CEOS get paid