My objection to Gift Aid

lescargo
Posts: 164
Joined: 27 Dec 2013, 11:51pm
Location: Tyneside

Re: My objection to Gift Aid

Postby lescargo » 2 Jan 2020, 12:11am

I respect your policy of not consciously avoiding but paying "your share" of tax.
This "tax fiddle" is small fry compared to the BILLIONS gathered by mr Cameron snr, funding
our previous spineless. ex. pm. with his global tax avoidance companies.
Remember the man?
no better; to forget!
We are, those who remain, donors to a Cycling Charity.!!
Not members of 130 years old cycling club!!!
Why??
Because of accountancy ethics!!
The accountants sold our birthright to become a charity and get more money!!
More funds in our cycling coffers to do what?
Well now we can afford a £82km pa Professional CEO.
Do we need this?
What can we achieve withut AGM.


we don't need professional

PH
Posts: 8092
Joined: 21 Jan 2007, 12:31am
Location: Derby
Contact:

Re: My objection to Gift Aid

Postby PH » 2 Jan 2020, 9:46am

soapbox wrote:Part of the reason for my post (as it has been in conversaqtions with people during the last couple of days) is to help people think about their taxes. It's on the back of the election, and all that 'free stuff'. The "pay less, get more" fantasy with regard to taxes needs to be questioned more, I think.

While I fully respect your choice where you have it to decide where your money goes, I'm not sure I get this.
No one is saying you'll get something for free, or you'll pay less, get more, not in the context of gift aid. They're saying you have an option to direct a tiny proportion of you income tax to a cause you believe in. Last year such causes for me were, CUK, York Minster, several NT properties and the British Heart Foundation, in all probably tax relief of around £60. I probably have more influence of where the tax from my spending goes, avoiding where possible using those companies who do their utmost to minimise their UK tax bill, Amazon, Starbucks, Ebay...
I'm also unsure of the emotive idea that a fiver's gift aid will be a fiver less for the NHS or some other essential service. Taxes are spent on all sorts deemed to be for the public benefit, arts, sports, leisure, transport, business... I get no say other than the ballot box which of these I approve or disapprove of. That those choices made on my behalf also include the option to make a few of my own seems entirely reasonable.

Oldjohnw
Posts: 2807
Joined: 16 Oct 2018, 4:23am
Location: Northumberland

Re: My objection to Gift Aid

Postby Oldjohnw » 2 Jan 2020, 10:30am

It's our Government which is promising both reduced taxes and greater public spending. Which means umprudent borrowing. You know, that thing that Tories don't do.
John

PH
Posts: 8092
Joined: 21 Jan 2007, 12:31am
Location: Derby
Contact:

Re: My objection to Gift Aid

Postby PH » 2 Jan 2020, 11:37am

Oldjohnw wrote:It's our Government which is promising both reduced taxes and greater public spending. Which means umprudent borrowing. You know, that thing that Tories don't do.

Well yes, but what has that to do with Gift Aid?

Oldjohnw
Posts: 2807
Joined: 16 Oct 2018, 4:23am
Location: Northumberland

Re: My objection to Gift Aid

Postby Oldjohnw » 2 Jan 2020, 11:43am

PH wrote:
Oldjohnw wrote:It's our Government which is promising both reduced taxes and greater public spending. Which means umprudent borrowing. You know, that thing that Tories don't do.

Well yes, but what has that to do with Gift Aid?


Nothing directly but others have decried gift aid preferring taxes.
John

mattheus
Posts: 1410
Joined: 29 Dec 2008, 12:57pm

Re: My objection to Gift Aid

Postby mattheus » 2 Jan 2020, 12:09pm

Oldjohnw wrote:
PH wrote:
Oldjohnw wrote:It's our Government which is promising both reduced taxes and greater public spending. Which means umprudent borrowing. You know, that thing that Tories don't do.

Well yes, but what has that to do with Gift Aid?


Nothing directly but others have decried gift aid preferring taxes.


Don't you see, PH - EVERYTHING is to do with the failings of the Tory Government; they've pulled the wool over your eyes, and brainwashed you into thinking otherwise!

wirral_cyclist
Posts: 691
Joined: 17 May 2010, 9:25pm
Location: Wirral Merseyside

Re: My objection to Gift Aid

Postby wirral_cyclist » 2 Jan 2020, 6:36pm

I used gift aid once and got a tax bill as I hadn't paid any tax!

User avatar
Graham
Moderator
Posts: 6024
Joined: 14 Dec 2006, 8:48pm

Re: My objection to Gift Aid

Postby Graham » 5 Jan 2020, 7:59pm

wirral_cyclist wrote:I used gift aid once and got a tax bill as I hadn't paid any tax!

I wondered what would happen if I accidentally initiated Gift Aid.

Expecting it to be a trust based system, but it would appear that HMRC are checking ( unless they are watching you or a random catch ).

And I wrongly assumed that they would :-
NOT pass on the Gift Aid amount to the charity
AND
notify you of your error

How did the sending you a tax bill work ??

User avatar
RickH
Posts: 4726
Joined: 5 Mar 2012, 6:39pm
Location: Horwich, Lancs.

Re: My objection to Gift Aid

Postby RickH » 5 Jan 2020, 9:57pm

Graham wrote:
wirral_cyclist wrote:I used gift aid once and got a tax bill as I hadn't paid any tax!

I wondered what would happen if I accidentally initiated Gift Aid.

Expecting it to be a trust based system, but it would appear that HMRC are checking ( unless they are watching you or a random catch ).

And I wrongly assumed that they would :-
NOT pass on the Gift Aid amount to the charity
AND
notify you of your error

How did the sending you a tax bill work ??

My understanding, from when I was treasurer of a small(ish) charity, is that HMRC will try to get the tax off the donor in the first instance if they find a discrepancy between tax paid & gift aid claimed. I think the idea is for charities not to lose out where they have claimed the gift aid in good faith.

When the claims by charities went online they did introduce the facility to make corrections if they were made aware of overclaiming - if, for instance, a regular donor informed them that they had stopped paying tax and the charity had already claimed money that wasn't going to be paid in tax.

On a point of general principal, there is no compulsion to agree to gift aid but it is an officially government sanctioned way of increasing the benefit to charities of your giving rather than a "jumping through loopholes" tactic to reduce tax payments by taxpayers. As a donor you get no benefit other than the satisfaction that the chosen charity has got more money.

wirral_cyclist
Posts: 691
Joined: 17 May 2010, 9:25pm
Location: Wirral Merseyside

Re: My objection to Gift Aid

Postby wirral_cyclist » 6 Jan 2020, 12:51am

Graham wrote:
wirral_cyclist wrote:I used gift aid once and got a tax bill as I hadn't paid any tax!

I wondered what would happen if I accidentally initiated Gift Aid.

Expecting it to be a trust based system, but it would appear that HMRC are checking ( unless they are watching you or a random catch ).

And I wrongly assumed that they would :-
NOT pass on the Gift Aid amount to the charity
AND
notify you of your error

How did the sending you a tax bill work ??


I probably mean not enough tax was paid, basically I hadn't paid enough tax to give it away. It's was years ago now, but I think it must have been an actual demand as it couldn't reasonably be recovered by amending a tax code as I pay very little tax. I reckon I was probably being 'stalked' by the feds :o as I went from decades of 40%, to effectively no income in a tax year. I still got self assessment forms (remember those) for many years after to confirm my kept man status :wink:

Bmblbzzz
Posts: 3026
Joined: 18 May 2012, 7:56pm
Location: From here to there.

Re: My objection to Gift Aid

Postby Bmblbzzz » 9 Jan 2020, 8:06pm

It's an interesting objection but it rests on a false premise: that ticking the gift aid box diverts some of your tax monies from general government income to the specific charity. This is wrong for two reasons: firstly, there is in practice little or no attempt to match gift aid claimed by a charity with tax paid by individuals; secondly, this is not diverted money, it is new money.

User avatar
Graham
Moderator
Posts: 6024
Joined: 14 Dec 2006, 8:48pm

Re: My objection to Gift Aid

Postby Graham » 9 Jan 2020, 8:52pm

^ . . . which is pretty much what i thought . . . . trust-based : no HMRC resources available to do matching & checking . . . .

Bmblbzzz
Posts: 3026
Joined: 18 May 2012, 7:56pm
Location: From here to there.

Re: My objection to Gift Aid

Postby Bmblbzzz » 11 Jan 2020, 9:31pm

I've raised this question with someone I know who is manager of a charity shop. He confirms that there is no actual reconciliation of gift aid claimed with tax paid by an individual.

User avatar
RickH
Posts: 4726
Joined: 5 Mar 2012, 6:39pm
Location: Horwich, Lancs.

Re: My objection to Gift Aid

Postby RickH » 11 Jan 2020, 11:44pm

Bmblbzzz wrote:I've raised this question with someone I know who is manager of a charity shop. He confirms that there is no actual reconciliation of gift aid claimed with tax paid by an individual.

There may be no automatic reconciliation of all donations between the charity claim & the donor but there are certainly some checks, both of donors (or else there would never be anyone getting a tax bill) & charities (who may have their claims audited). With claiming being all online now it must be easier to cross check within HMRC records. I would imagine here are at least some random checks but it is a while since I've been involved with the system.

AndyK
Posts: 812
Joined: 17 Aug 2007, 2:08pm

Re: My objection to Gift Aid

Postby AndyK » 13 Jan 2020, 10:30pm

RickH wrote:
Bmblbzzz wrote:I've raised this question with someone I know who is manager of a charity shop. He confirms that there is no actual reconciliation of gift aid claimed with tax paid by an individual.

There may be no automatic reconciliation of all donations between the charity claim & the donor but there are certainly some checks, both of donors (or else there would never be anyone getting a tax bill) & charities (who may have their claims audited). With claiming being all online now it must be easier to cross check within HMRC records. I would imagine here are at least some random checks but it is a while since I've been involved with the system.

Charities have to provide the details of every Gift Aid donor when they claim the Gift Aid, so it's perfectly possible for HMRC to do spot checks, and as RickH says, there is a high degree of automation in the tax process. With all due respect to Bmblbzzz's charity shop manager friend, I don't think they could know for sure. HMRC tend not to reveal the details of how and what they check, for obvious reasons.

At a simpler level, don't forget that on your self-assessment tax return, you fill in a number for how much you gave in gift-aided donations in that tax year. If, when the final calculation is done, that number turns out to be more than 4 times what you owe in tax for the year, then you have (by your own admission) bust your limit for gift-aid giving. No need for fancy correlation between different data sources, it's all in the tax return.

To answer some earlier points:

Yes, it is in effect diverting a small amount of money that would otherwise go into the government's general spending pot. It's effectively your own little piece of tax hypothecation. It is relatively tiny though, as PH says.

@Stradageek: "The government" cannot just remove a charity's charitable status. That's in the hands of the Charity Commission. Of course the commission must follow rules that were ultimately laid down by the government, but those rules permit a charity to campaign against government policy. There's a summary here. Claiming Gift Aid is not the same as getting government funding. Government grants generally come with strings attached, stipulating that the money can only be spent on certain activities. Gift Aid payouts don't. As the accountants put it, the grant payments are "restricted funds" while the gift aid money is "unrestricted".

The whole Gift Aid thing is a horrendous mess and operates to an arcane set of rules with no real logic to them (trust me, I've read the HMRC guidance). Sadly I can't see that happening any time soon.