Backdating gift aid
Somewhat more confusingly, if you’re over 65 for all or part of the tax year but don’t get the full age-related personal allowance because your income is too high, you may also get some tax back.
So simple indeed, that even if you’re completely tax-averse and can’t tell your ISA from your elbow, you still won’t have the slightest difficulty in understanding it.Tell the Revenue of your Gift Aid payments to charity – by letter if you don’t fill in a Tax Return – and you may well end up paying less tax.The arithmetic really isn’t at all straight forward for this, and it would take a couple of columns to go through all the possibilities, but the principle is fairly simple.But if you choose one of the last four options, the charity has to confirm your declaration by writing back to you.If you only pay tax at 20% through deduction from bank and building society interest, you can still make a Gift Aid declaration.Don’t provide a free tea; charge everyone a couple of quid and then donate it back again under Gift Aid.Of course, if you don’t pay your subscription yourself, you haven’t made a donation.So if your Ringing Association is a charity and you sign a declaration now, it will be effective for all your subscriptions paid from April 2000 onwards – as well as for all your donations from April 2000 onwards – and that’s a lot of tax back.The Branch or Association Treasurer will do all the work of tracing your earlier payments in his or her receipt book. You may be surprised by this as there are rules limiting the amount of personal benefit you can obtain from a subscription before it ceases to count as a donation.What we call your what the charity claims from the Revenue – are regarded as reducing your taxable income by the same amount.The effect is that many retired people get £14.10 tax back for every £100 they give to charity. Well, first a Gift Aid declaration can also cover the previous six years.