Gift Aid - I don't get it

[TsarChasm]

It seems that you can actually make money by gift aiding stuff to charity. I don't understand this.

I give things to the local charity shop and fill in a gift aid form. Now they say (got a letter) I can claim back the money they made selling the stuff.

I wouldn't do that of course. But legally I could. Eh?

eh#;?

No, no no.
The way gift aid works is that the charity can claim the tax back on the amount raised by your gift.

here

If you make a gift aid donation, and are a Higher rate tax payer then you can reclaim some tax, through your tax return. I presume that the same must apply to the charity shop donations. So maybe if you donate soemthing that they sell for £50, you can reclaim the higher rate tax paid on £50 of your income?

Here's the bit in the letter that made me go 'eh?'..

'Sue Ryder can only claim Gift Aid if it voluntarily donated to us however if you wish to reclaim the proceeds from the sale, please contact us in writing at the adreess below within 21 days of the date of this letter stating your Donor ID Number'

That makes no sense at all!

We give regular money to charity via Gift Aid, it means that (in effect) we don't pay tax on the money we donate. The way we reclaim is, when we submit our income (for tax credits or whatever), we deduct the amount we have donated to charity from our income (and tell them we have done this).

As far as the charity is concerned, they can claim the tax on your behalf on the value of your goods, so for every £10 worth of stuff you donate the the shop, they get £12.20.

Suppose Sue Ryder are saying that you are entitled to claim your own tax bits back, from the value of your donated goods.

I know! Weird non?

I don't know if they mean the whole lot (in this case it totted up to £40, they say) or a percentage of it. I'm always taking in bags of stuff. With 3 dc the turnover from chez Tsar is quite brisk.

That seems wrong. I mean if you give it to charity, you don't expect to get it back...

that makes no sense at all (the letter from Sue Ryder, I mean). Are they gettign confused with the US system where you can reclaim the value of the donation against tax (I think)? Certainly in the UK (unless they've changed it in the past few months) it's only monetary donations which can be gift aided. And then you cna only claim the additional bit if your a 40% tax payer.
Most odd.

actually, they are right (I'm very sad and have the GA page on HMRC bookmarked ) - what they're doing is treating you as selling the items, and then donating the cash to them - they are simply acting as your agent in the selling process. What you then do (as a higher rate tax payer) is show your "cash donation to charity" on your tax return.
Am sure that hasn't always been allowed though?

Oh well, I'll chuck the letter away anyway.

Goodness knows we're skint but that isn't the way to go at all. I love charity shops. They've been a godsend over the years to us.

I just return the things when no longer required, back into the system iyswim.

This isn't the first letter I've had like this from them. Maybe I'm getting the wrong end of the stick

Donated goods being treated as cash for gift-aid purposes is a recent development AFAIK!

whew - I'm not going mad then - there I was thinking I knew all there was to know about Gift Aid (managed to get a nifty acceptnace for GA on membership subscriptions for a particular charity - worth £5K a year to them ) and they go and make sodding changes without telling me..

my local sue ryder shop tried to explain the "acting as a selling agent" to me.. I was well confused.

I just filled in the form and left them to it.

Does this mean they have to know who gave them all their items ??

I had the same letter from Sue Ryder. I just enjoyed seeing how much they had got for the sale of the items. Made me realise how valuable donating it is and propelled me to do it more.

they'll need to mark each price tag with a code matching the individual donor, then record when and how much for each donor's items have sold. Quite a lot of extra admin, but financially worth it I'd say.

What you should do is reclaim it and then give the money to Sue Ryder too. I think that is what they are hoping you will do, though they are probably not allowed to say so in their letter.

What you should do is reclaim it and then give the money to Sue Ryder too. I think that is what they are hoping you will do, though they are probably not allowed to say so in their letter.