Hate the gift aid rules

[Marue]

I always pay gift aid amount as I can afford it and feel to guilty not to pay it, but I hate the updated rule where you have to volunteer to pay 10% more so they can claim back 25%, especially as I'm a higher rate tax payer and paying out of my taxed income for these things.

I do worry that some people that can barely afford the normal entry pay this increased amount out of guilt.

What do you mean by 'normal entry', and 'volunteer to pay 10% more'? To whom?

I never fully understand gift aid.

It says you have to be a tax payer.

As I don't earn enough, i don't pay tax. So always think i can't gift aid? (as technically not a tax payer)

Also, did not know the giver is the one who pays this!

Can you link op? Or explain the changes?

Gift aid shouldn't cost you anything!

I'm confused. When I gift aid a donation it doesn't cost me any more. I still pay my £10 or whatever but the charity can then reclaim the basic rate of tax on that amount thereby increasing the value of my donation to them. But the actual cost to me remains the same whether I gift aid or not.

I think OP is referring to when you pay to go into somewhere and there is an option to pay some more (ie a gift over the usual entry fee) usually about 10% and then the place can claim back gift aid on the whole entrance fee. Unless there is a gift element to the payment, rather than just entrance, the charity or whatever can't claim any gift aid. I noticed this as Galstonbury Abbey earlier this year.

Is this for an entrance into a charity run park or something? The 10% is voluntary contribution and it is only the 10% that can be gift aided, so it is just a way of asking you for more money for the charity.

I don't understand this. I thought you donated an amount and if you are a taxpayer the gift aid is given on top. It doesn't cost you as an individual?

It's not new at all - the rules haven't changed (though some places were applying the rules incorrectly and have had their obligations explained to them)

Gift Aid generally applies to donations made from income that has been subject to Income Tax or Capital Gains tax.

Normally, payments for goods and services are not considered donations and so Gift Aid doesn't apply.

Charities that charge for services like entrance fees etc can convert the money paid into being considered a gift in two ways.

the charity can grant free admission to those who make a minimum donation that can be gift-aided so long as either:

(1) that minimum donation is at least 10% more than the normal entrance fee or

(2) that minimum donation is the same as the normal entrance fee but paying once gives you access for a year whether or not you declare for gift aid, such that the fee is basically a membership subscription rather than a transaction for a service.

As a higher rate taxpayer OP you can claim back 25% of whatever you give to charity from the government in your tax return so when you "pay 10% extra" you are actually paying 17.5% less than the normal non-giftaid entrance fee so unless you can't be bothered to complete your tax return properly you aren't really doing badly out of this.

I have visited a couple of attractions over the years where they automatically charge you the higher 'Gift Aid' admission price instead of asking you which you want.
A friend of mine who was on quite a tight budget when she visited a local zoo, had budgeted her visit based on paying the normal admission price and not the Gift Aid one. She was made to feel really guilty by the man in the booth when she said she wanted to pay the lower price.

Fish Should I be recording all my charitable donations over the year and reclaiming something?

I thought Gift Aid was essentially me saying to the charity "You go ahead and claim my tax relief back off that donation".

I think the gift aid rules are messy and awkward too
I feel we are tax payers as DH earns and pays tax. My earnings in a year are generally below the tax threshold.
Never too confident whether I can gift aid donations and entrance fees or not?
Understandably you always feel like they'd like you to

MaidOfStars no, you can't reclaim it - if you tell the charities that you are a taxpayer they can reclaim it back from the government.

Juggling your DH can gift aid, you can't (you're not a tax payer).

I know you're just explaining the system Anchor, but in lots of other cases our family finances are looked at as a unit - so regarding tax credits, claiming any benefits if I'm not working (not possible I think as DH is employed?), even prescription charges? So why when it comes to gift aid are our finances considered as separate all of a sudden?

On a basic level, tax is personal. You pay tax individually, based on just your income. If your DH was a higher tax payer and you did pay tax, you wouldn't have to pay the higher rate because of him, either.

For anything that is based on income, it's household income - so benefits, tax credits, prescription charges. Although if you've been working, you'd be entitled to contributions based benefits for a while, and it would only be after that that your husbands income would matter. So it's complicated for benefits, but there are some circumstances where your individual circumstances are important.

I didn't make the system, but that's the way it works, I looked into it for my PIL (FIL works, MIL doesn't). He can gift aid but she cannot, because she isn't paying any tax, although he pays tons.

Fair enough Anchor - I know you didn't make the system!
I do think it's a bit annoying though
Maybe the government could just be more generous and also simplify the system by assuming all money given to charity has been taxed at the basic rate. That way the swings and roundabouts of money not taxed and money taxed at the higher rate would surely even itself out, it would be much simpler, and people on low wages or not working wouldn't be put in a slightly awkward position so often? - whenever they try to do something nice for other people (giving to charity), for their DC (on a day out), or with their communities (with regular contributions to churches or other faith groups)?

MaidOfStars and dodobookends reclaiming on a tax return is something only higher rate taxpayers can do. ordinary basic rate taxpayers who pay 20% tax can't.

All gifts to charity can have the full amount of tax that had been paid on them reclaimed. The charity only gets the basic rate because it would be an invasion of privacy for charities to know which of their donors pay higher rate, so if you are a higher rate taxpayer you can claim back the difference between the rate you pay and the basic rate.

If you pay tax at 40% and give £80 to charity, the charity gets £20 gift aid making your gift worth £100 to them, but you claim back £20 from hmrc so it only cost you £60. Only works if you make gift aid declarations and keep written records.

I pay higher rate tax.

Last week, I donated £100 to two charities and gift aided.

How do I start reclaiming?

Juggling, just put the donations in your DH's name

And a follow up...can I only reclaim for the amount of charitable donation equivalent to the amount of money I get in the 40% bracket?

Jesus, not bring a bellend here but I give a fair whack to charity (10-15% of my net pay). How do I not know this?

We can claim back tax? That is people on liver 43k not the highest tax rate?

This is muddling the waters a bit though, I was talking about entry to somewhere where you pay 10% extra and then they can claim it all as gift aid. And them guilting people into doing it.

I have gift aid cards from charity shop donations too. And does sponsoring marathon runners on JustGiving count?