Tax relief on Gift Aid if you don't fill in a tax return

[davek_964]

Years ago, I rented out a property so had to fill out a tax return.

I haven't done that for years, and last year HMRC told me that I would no longer need to fill out a tax return. However - because I generally make Gift Aid payments through the year (of varying amounts) and am a higher rate tax payer, I usually get a refund. So - last year, I called them and said : I still want to complete a tax return.

They've written to me again this year, and once again told me I don't need to complete a tax return in future. Before I call them and say "Yes I do" - is there an alternative way of informing them of Gift Aid payments and obtaining a refund? I've searched and found references to a form P810 - but most threads seem to suggest it's not really used anymore.

I'd like very much to avoid completing the tax return (although it is pretty simple these days) but obviously still want my refunds.

[Eric Mc]

Phone HMRC and talk to them. If you are under PAYE, they can adjust your coding.

Just be warned, you will never pay the correct tax under PAYE ever again.

[davek_964]

Eric Mc said:

Phone HMRC and talk to them. If you are under PAYE, they can adjust your coding.

Just be warned, you will never pay the correct tax under PAYE ever again.

Thanks.

I would prefer it's not done via a change in tax code - the amount varies each year and I prefer getting a refund to finding that because I paid less one year, my tax code reduces the next year.

I'll call them and tell them I still want to do a tax return.

[Eric Mc]

davek_964 said:

Thanks.

I would prefer it's not done via a change in tax code - the amount varies each year and I prefer getting a refund to finding that because I paid less one year, my tax code reduces the next year.

I'll call them and tell them I still want to do a tax return.

HMRC's plan is to abolish the tax return. The new way was supposed to start with this current tax year i.e. 2018/19 but it has been postponed until 2020 at the earliest.

Soon, you won't have any choice but to operate through codes etc.

[davek_964]

Eric Mc said:

HMRC's plan is to abolish the tax return. The new way was supposed to start with this current tax year i.e. 2018/19 but it has been postponed until 2020 at the earliest.

Soon, you won't have any choice but to operate through codes etc.

Getting a payment into my bank each Autumn is quite nice. Finding my tax free allowance is reducing because I wasn't charitable enough the previous year won't be.

[rfisher]

What % do you get back with charitable donations if you are a 40% tax payer?

[davek_964]

rfisher said:

What % do you get back with charitable donations if you are a 40% tax payer?

I've never worked it out, but I believe it's the difference between 25% and 40% - i.e. 15%. This year I got more than that back (it was roughly 25%) but I think that's because my tax code was wrong last year due to our healthcare switching from a P11D benefit to deductions each month as part of PAYE.

[oop north]

davek_964 said:

rfisher said:

What % do you get back with charitable donations if you are a 40% tax payer?

I've never worked it out, but I believe it's the difference between 25% and 40% - i.e. 15%. This year I got more than that back (it was roughly 25%) but I think that's because my tax code was wrong last year due to our healthcare switching from a P11D benefit to deductions each month as part of PAYE.

Easiest way is to use a gift aided donation of £80. That is deemed to be net of basic rate tax deduction at 20%, so the charity gets £20 back, making £100 total. In your tax computation, you can have a theoretical full deduction so £40 (40% x £100) but the charity already has had £20 (or to look another way you have benefit of £20 tax saving because you handed over £80 but the charity got £100).

So in terms of the 40% taxpayer’s view, you pay over £80 to the charity and claim £20 back from tax man (which is 25% of your donation but 20% of the gross gift) so the net cost to you is £60. And the charity gets £100