Query

A place to discuss the issues relating to the proposed change in the national CTC’s structure.
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Graham
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Re: Query

Postby Graham » 24 Dec 2010, 1:59pm

Simon L6 wrote:
velotour wrote:Does the reply by Barry Flood mean that were the CTC to become a charity they would have to contact all the members to ensure that they paid UK tax (ie they were not below the tax threshold?)

that's the implication within the CASS report. I imagine that the question would be asked at renewal time.

I don't think it works like that. The onus is upon the person intending to Gift Aid to declare that they have paid at least as much tax ( in that Tax Year ) to cover the value of the Gift Aid.

In practice I doubt very much whether any checking is done, by HMRC, as Gift Aid values are usually fairly small amounts of money.

I doubt very much whether Gift Aid donors bother to check that they have paid enough tax. They either know for sure OR are unaware of the requirement OR really cannot be bothered to check.

thirdcrank
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Re: Query

Postby thirdcrank » 24 Dec 2010, 2:21pm

I think that while tax gatherers may leave the reclaiming of tax to the charities on trust (the British Heart Foundation has started asking for a gift aid declaration on charity bags) it is possible for the individual tax-payer to get into problems (especially if they are a not-enough-taxpayer.) If we make charity donations, it's generally to DEC and I do it online so it goes against my tax, but last year we split our RSPB membership 50/50, purely because in her first year in retirement, she received a simplified tax return form. My wife has only a relatively small pension income, but because it involves a couple of AVC providers (what a con that was :evil: ) she seems to be keeping part of the population of Scotland in work at three different tax offices. She received an assessment to repay the tax reclaimed by the RSPB on half of our joint membership. We sorted it out (with no help whatsoever from the so-called helpline.) It is a source of potential confusion and aggravation for anybody on a low income.

Jonty

Re: Query

Postby Jonty » 26 Jan 2011, 1:55pm

Barry Flood wrote:
swansonj wrote:Could someone who is an expert in tax please confirm if this is true or not? I have never heard before of the option of the individual making a donation reclaiming the basic rate tax. I thought the system was that the charity (and only the charity) could reclaim the basic rate taz and the individual could reclaim any higher rate tax. I thought subsricptions were only tax deductible if to a professional organisation necessary for your trade.


I hate to admit this in public but I was an Inspector of Taxes. In answer to several points I see discussed in the forum, this is how Gift Aid works
First you must pay UK tax.

Second is the gain to the CTC.
Gift Aid donations, i.e. subscriptions if we become a unified charity, are regarded as having basic rate tax deducted by the member. The CTC would take your donation - which is money you've already paid tax on - and reclaim the basic rate tax from HM Revenue & Customs on its 'gross' equivalent - the amount before basic rate tax was deducted.
Basic rate tax is 20 per cent, so this means that if your full CTC subscription is, say £36, then using Gift Aid, it’s worth £45 to the CTC, so we get an additional £9 for every member paying a full sub of £36.

Third is the gain to a higher rate taxpayer personally, (and is separate and additional to the gain to the CTC described above).
If you pay higher rate tax, you can claim the difference between the higher rate of tax 40 and/or 50 per cent and the basic rate of tax 20 per cent on the total 'gross' value of your subscription to the CTC.
For example, if your subscription is £36, the total value of your subscription to the CTC is £45 - so you personally can claim back:
• £9 - if you pay tax at 40 per cent (£45 × 20%)
• £13.50 - if you pay tax at 50 per cent (£45 × 20%) plus (£45 × 10%)
You can make this claim on your Self Assessment tax return.

Hope this helps.
Regards
Barry Flood
CTC Councillor


Hi Barry
What happens if you're a 50% taxpayer? 8)
jonty

Jonty

Re: Query

Postby Jonty » 26 Jan 2011, 1:57pm

Please delete my post above as my question has already been answered.
jonty

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horizon
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Re: Query

Postby horizon » 26 Jan 2011, 2:18pm

John Catt wrote:You can see the things that qualify as Charitable Purposes at http://www.charity-commission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/charitable_purposes.aspx. Probably the most important from the CTC's point of view is "the advancement of amateur sport".

This is defined as:

[i]1. The advancement of amateur sport means the advancement of any sports or games which promote health by involving physical or mental skill or exertion and which are undertaken on an amateur basis. Our published guidance on Charitable Status and Sport is currently being revised to reflect the definition of sport in the Charities Act.



Did anyone challenge this?
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Guy951
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Re: Query

Postby Guy951 » 26 Jan 2011, 2:42pm

horizon wrote:
John Catt wrote:You can see the things that qualify as Charitable Purposes at http://www.charity-commission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/charitable_purposes.aspx. Probably the most important from the CTC's point of view is "the advancement of amateur sport".

This is defined as:

[i]1. The advancement of amateur sport means the advancement of any sports or games which promote health by involving physical or mental skill or exertion and which are undertaken on an amateur basis. Our published guidance on Charitable Status and Sport is currently being revised to reflect the definition of sport in the Charities Act.



Did anyone challenge this?

Good point. That's like saying driving to work is participating in amateur motor sport.
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