Gift Aid is allowable for tax credit purposes. However, should the deduction be grossed up the standard rate (20%) or byt he amount the charity receives in total (22%). Guidance by HMRC does not make it clear:
http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04003.htm
I assume it is by the standard rate, anyone know any different?
Robin Dunne
Replies (5)
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Basic rate
The payment you make is after basic rate tax has been deducted. If you pay £80, it means that you have really paid £100 less 20% tax.
The charity can claim back the £20 tax. If you pay tax at 40%, you can claim back the additional 20%.