Leverage on the Taxman (maybe)

Income Tax, Council Tax, National Insurance and VAT issues.

Leverage on the Taxman (maybe)

Postby emmanualgoldstein » Thu Oct 29, 2009 1:58 pm

I was told recently that there is a mechanism that might exist that would provide us with some leverage on the taxman.

I can find no information about this, so really this is a request for information, if anyone can provide it from their own experience.

Apparently a mechanism exists whereby you can make a contribution to charity and have the taxman match that contribution using the taxes you have paid to him, up to the limit of the amount of taxes you have paid.

So, if you pay £100 of taxes, and donate £200 of charity, the taxman gets zero, the charity gets £300, but of course you are out of pocket an extra £200. However if what Im told is true, then there could be some advantage here since it would provide us with some control over Mr I Revenue.

Can anyone shed some light as to the truth of this? Anyone know about the tax/charity relationship?
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Re: Leverage on the Taxman (maybe)

Postby kevin » Thu Oct 29, 2009 4:53 pm

It's called gift aid I believe

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/GivingMoneyToCharity/DG_10015097

Once your charity or CASC is recognised by HMRC, you can reclaim the basic rate of tax on Gift Aid donations - this is 20 per cent from 6 April 2008. You can work out the amount of tax you can reclaim by dividing the amount donated by four. This means that for every £1 donated, you can claim an extra 25 pence.
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Re: Leverage on the Taxman (maybe)

Postby emmanualgoldstein » Thu Oct 29, 2009 5:14 pm

Thanks kevin
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