Is 'Gift Aid' likely to continue?

[railfan99]

Is Gift Aid likely to continue under the newly elected UK government, or will it be scrapped?

What percentage of travellers on heritage railways help the latter by specifying 'Gift Aid'?

It's not something we have in my country.

 

[STINT47]

I would be Highley surprised if Gift Aid were to be stopped.

Gift aid was originally introduced in 1990 for donations over £600 and amended in 2000 to cover any amount. It's therefore survived several PMs and governments.

I cannot see the current government wanting to chang it and even if they did it would generate a lot of negative headlines to make it not worth the political damage.

 

[paul1609]

Is Gift Aid likely to continue under the newly elected UK government, or will it be scrapped?

What percentage of travellers on heritage railways help the latter by specifying 'Gift Aid'?

It's not something we have in my country.

Gift Aid is only available to those heritage railways which are operated by Charities. In that context heritage railways are very much small fish. Big beneficiaries would be organisations like the National Trust and the Church of England for the maintenance of historic churches. Withdrawal of Gift Aid would leave those organisations teetering on the financial brink so I think wholesale withdrawal of the scheme would be deemed political suicide. I havent been involved in Gift Aid at the K&ESR for the last 10 + years but at that time it was worth c £70k pa so it was a nice to have rather than an essential.

 

[Bletchleyite]

I would be surprised if Gift Aid itself were removed. However the ability to claim (and pocket) the "step up" to a higher tax bracket on donations via a tax return might and probably should be dropped. Charities don't directly benefit from it (unless the extra is donated) and it only affects people who pay higher rate and do tax returns which tends to be well-off people who don't really need that money.

 

[30907]

I would be surprised if Gift Aid itself were removed.

I agree, as IIRC Gordon Brown was behind the major simplifications of the scheme, and VAT relief on places of worship etc.

However the ability to claim (and pocket) the "step up" to a higher tax bracket on donations via a tax return might and probably should be dropped. Charities don't directly benefit from it (unless the extra is donated) and it only affects people who pay higher rate and do tax returns which tends to be well-off people who don't really need that money.

Possibly. OTOH, I can think of people who as a result were able to give a bit extra.

Gift Aid is only available to those heritage railways which are operated by Charities. In that context heritage railways are very much small fish. Big beneficiaries would be organisations like the National Trust and the Church of England for the maintenance of historic churches. Withdrawal of Gift Aid would leave those organisations teetering on the financial brink so I think wholesale withdrawal of the scheme would be deemed political suicide.

I agree entirely (though actually 70k pa will be much more than most charities claim).

 

[IanXC]

I would be surprised if Gift Aid itself were removed. However the ability to claim (and pocket) the "step up" to a higher tax bracket on donations via a tax return might and probably should be dropped. Charities don't directly benefit from it (unless the extra is donated) and it only affects people who pay higher rate and do tax returns which tends to be well-off people who don't really need that money.

Couldn't agree more. Scrapping the ability for higher (and additional?) rate taxpayers to reclaim further funds would also simply the tax code and reduce administration considerably.

 

[SeanG]

I agree it should stay but what should go are the places (National Trust I'm looking at you) that charge you more to enter if you want to Gift Aid your entry fee.
Plus I'm not sure most places do it correctly - as we are often verbally asked and not asked for any proof of being a UK taxpayer etc

 

[Bill57p9]

I agree it should stay but what should go are the places (National Trust I'm looking at you) that charge you more to enter if you want to Gift Aid your entry fee.
Plus I'm not sure most places do it correctly - as we are often verbally asked and not asked for any proof of being a UK taxpayer etc

I forget the exact wording, but to allow an entry fee to be gift aided (in full), it has to contain a voluntary "donation" of at least something like 10%, hence the differential pricing: This is not something organisations have a choice over.

Couldn't agree more. Scrapping the ability for higher (and additional?) rate taxpayers to reclaim further funds would also simply the tax code and reduce administration considerably.

However the current arrangement does encourage philanthropy: charitable donations are tax free.

Whilst there could be an option to gift aid claimed by charities to be greater for higher (/additional) rate taxpayers this would end up horrendously complex for charities.

Come to think of it, shouldn't charities be able to claim additional Gift Aid for (most) Scottish tax payers to account for the higher basic rate of tax??

 

[35B]

I agree it should stay but what should go are the places (National Trust I'm looking at you) that charge you more to enter if you want to Gift Aid your entry fee.
Plus I'm not sure most places do it correctly - as we are often verbally asked and not asked for any proof of being a UK taxpayer etc

I administer Gift Aid. The rules for charity visitor attractions are complicated, but require either an increased admission fee or free re-admission for a year to gain the benefit of Gift Aid. To claim, they have to submit name and postcode, so if they don’t collect that information, they won’t get the money back.

The concession for Higher Rate taxpayers is weird. The theory is that the tax is be8ng signed over to the charity so the donor gets to reclaim the difference as an incentive to give more. My hunch from experience is that this works ok, and that the effect is to encourage more giving than if it didn’t exist (bear in mind that for a donation in April 2023, most relevant donors won’t submit their tax returns till late 2024 or even early 2025). But I suspect there are easier ways to go about it.

 

[172007]

The vast Majority of Train drivers are on the higher rate tax and therefore can reclaim their tax back from gift aid. If you ask around the mess room no one does and most will tell you not to try as once you do you will have to do self assessment and the tax authority will scrutinise you with is rubbish.

The aslef magazine always has the are you paying too much tax advert but never mentions gift aid either.

How many higher rate people in the country never claim the tax back or give more initial as they can claim it back.

Has the money saving expert ever covered it?

 

[35B]

The vast Majority of Train drivers are on the higher rate tax and therefore can reclaim their tax back from gift aid. If you ask around the mess room no one does and most will tell you not to try as once you do you will have to do self assessment and the tax authority will scrutinise you with is rubbish.

The aslef magazine always has the are you paying too much tax advert but never mentions gift aid either.

How many higher rate people in the country never claim the tax back or give more initial as they can claim it back.

Has the money saving expert ever covered it?

Point of order - there is a way to recover tax without doing a full tax return.

 

[notverydeep]

The vast Majority of Train drivers are on the higher rate tax and therefore can reclaim their tax back from gift aid. If you ask around the mess room no one does and most will tell you not to try as once you do you will have to do self assessment and the tax authority will scrutinise you with is rubbish.

The aslef magazine always has the are you paying too much tax advert but never mentions gift aid either.

How many higher rate people in the country never claim the tax back or give more initial as they can claim it back.

Has the money saving expert ever covered it?

Reclaiming Gift Aid is worthwhile for higher rate tax payers if you already have to complete a tax return. But don't even think about it if you don't already complete a tax return (unless you gift aid thousands of pounds) - it isn't the scrutiny, it is just the sheer chore of actually completing one (and keeping the paper work you need). So thanks very much Messers Clegg and Cameron for the 'just into higher rate' purgatory for some parents that is the current Child Benefit system...

 

[Djgr]

More fool them then. For people without complicated income arrangements, self assessment is a breeze.

 

[davews]

More fool them then. For people without complicated income arrangements, self assessment is a breeze.

Indeed. I started doing self assessment when I ran my own company, it was a lot harder in the paper return days. These days after waiting for all the information needed to arrive it takes an hour to prepare then around fifteen minutes online to complete, with the tax bill known immediately. OK I have never been in the higher tax bracket but the Gift Aid bit is just a box filling exercise.

 

[jfollows]

More fool them then. For people without complicated income arrangements, self assessment is a breeze.

Exactly. I’ve done one for ever and in fact I prefer doing one now rather than leaving HMRC to get it wrong. First time is a bit of head scratching. Nowadays I do mine on 6 April and forget about it for a year.

The only “scrutiny” has been their incompetence, such as demands to pay money I’ve already paid. Tiresome. Having done the self-assessment already means I’m well placed to write back to them and tell them why they’re wrong.

Mind you, I have thought about offering to do it for others. I won’t, in reality, because I’m not officially qualified and there could be implications, but I could do it.

I was pestered to sign up for Gift Aid when I wasn’t paying Income Tax recently - I now am - and I’m sure it would have gone through if I had.

As 35B says above, there's no requirement to do a self-assessment return in order to claim back tax if you're a higher rate taxpayer, but I found in the end that there were a number of small things, each of which could be addressed separately (for example, travelling first class on business but my employer only reimbursed standard class) and it was simpler to do the whole lot in one place, the self-assessment process. Now my tax affairs are simpler, but I prefer to be more in control, especially given that I'm going to start taking income from two pensions in the next two years.

 

[BlueLeanie]

More fool them then. For people without complicated income arrangements, self assessment is a breeze.

Absolutely. Self assessment is incredibly simple.

I start every financial year with a new, old fashioned, foolscap folder and put any relevant tax records in there (eg professional fees). Mayday weekend I go through all through my bank accounts and record all my interest income.

Sadly my employer is really slack, and will take until the last minute to issue the P60.

The reality for me is it takes about an hour of record keeping/filing throughout the entire financial year, then 10-20 minutes to complete and submit the return.

 

[RGM654]

The rationale for higher-rate tax payers being able to reclaim the tax above 20% on donations is that the donations come from your pre-tax income. You give away some of your income to a charity. Therefore you do not have that income to spend on yourself. Therefore it seems entirely fair that you should not have to pay tax on it.

 

[Mojo]

The vast Majority of Train drivers are on the higher rate tax and therefore can reclaim their tax back from gift aid. If you ask around the mess room no one does and most will tell you not to try as once you do you will have to do self assessment and the tax authority will scrutinise you with is rubbish.

You don't have to do a self assessment whatsoever if you are claiming the extra tax relief on Gift Aid donations - whoever has told you this is incorrect. You can simply write a letter or make a telephone call (when they are open!) to the tax office and your tax code will be adjusted accordingly. Even better is that this carries forward to subsequent years.

 

[jfollows]

Sadly my employer is really slack, and will take until the last minute to issue the P60.

I am fortunate that I don't need my P60 in order to complete my tax return, all the information I need is on my month 12 pay slip (SIPP).

I'm amused this year that I owe £2 and will make appropriate payment in January 2025.

 

[En]

I administer Gift Aid. The rules for charity visitor attractions are complicated, but require either an increased admission fee or free re-admission for a year to gain the benefit of Gift Aid. To claim, they have to submit name and postcode, so if they don’t collect that information, they won’t get the money back.

The concession for Higher Rate taxpayers is weird. The theory is that the tax is be8ng signed over to the charity so the donor gets to reclaim the difference as an incentive to give more. My hunch from experience is that this works ok, and that the effect is to encourage more giving than if it didn’t exist (bear in mind that for a donation in April 2023, most relevant donors won’t submit their tax returns till late 2024 or even early 2025). But I suspect there are easier ways to go about it.

I would agree wuth you on all points.

I think a lot of peopel underestimate the scrutiny that all Charities face
Also as you point out reclaiming the difference in taxation between the gift aid amount and any higher rates requires the taxpayer to to be fillling a tax return

 

[simonw]

I would agree wuth you on all points.

I think a lot of peopel underestimate the scrutiny that all Charities face
Also as you point out reclaiming the difference in taxation between the gift aid amount and any higher rates requires the taxpayer to to be fillling a tax return

It doesnt, you can just drop the tax man an email and they will adjust your coding.

 

[Snow1964]

The vast Majority of Train drivers are on the higher rate tax and therefore can reclaim their tax back from gift aid. If you ask around the mess room no one does and most will tell you not to try as once you do you will have to do self assessment and the tax authority will scrutinise you with is rubbish.

The aslef magazine always has the are you paying too much tax advert but never mentions gift aid either.

How many higher rate people in the country never claim the tax back or give more initial as they can claim it back.

Has the money saving expert ever covered it?

Martin Lewis has covered Gift Aid before

After the first time of doing tax return (when you tend to look up lot of the notes), I find can do online tax return in under an hour (and since payroll tax when digital, it has often already populated your employment figures so don't even need to copy them off your P60.

For many people, claiming gift aid, and getting laundry allowance (if you wash any work clothes (eg a polo shirt with logos or company name), and claiming items provided for work are standard practice.

Other common ones are putting money into private pensions (especially to avoid child benefit clawback), or because you rent out a room or property. All of which needs to go on tax return, so might as well do it all in one go, especially as it is so easy to do online now.

Unless you have any really weird entries, HMRC don't have staff to query anything these days, so just seems to go through, so idea will be scrutinised every time do tax return is rubbish.