Question about Gift Aid

Question about Gift Aid

Didn't find your answer?

Client receives salary at the LEL and the rest as dividends. He wants to make a donation (as an individual) to a charity.

For Gift Aid, would he be regarded as a Tax payer on the basis that the dividend comes with a tax credit?

Have been searching on Google but cannot find the answer. Have phoned HMRC charities but got this:  'the person you need is in a meeting'

Thanks for the guidance on this.

Replies (5)

Please login or register to join the discussion.

Quack
By Constantly Confused
08th Oct 2010 15:22

Tax liability

Provided their tax liability for the year is as much as the gift aid addition they will be fine.  So if all they get is lower rate dividends they will have no tax to pay and so will get a GA bill.

If some of the dividends are taxed at above 10% they may be ok.

Thanks (0)
avatar
By nogammonsinanundoubledgame
08th Oct 2010 15:40

I disagree ...

... with the above response.

And so does our software (not that that is necessarily conclusive of course).

I put in £5K salary, £20K divis, £1K gift aid.  No liability

With kind regards

Clint Westwood

Thanks (0)
avatar
By Towards excellence
08th Oct 2010 16:45

I agree with Clint

Intuitively, I think the donor has suffered the tax, therefore should be allowed to treat the tax credit on dividends received as 'paid'.

SA

 

 

Thanks (0)
avatar
By Swedish Chef
08th Oct 2010 16:56

I also agree with Clint

The individual does have a tax liability on the dividends - that in itself makes him a taxpayer - it is just that the liability is settled from the tax credit attached to it.

Though I do agree with the original respondent that there may be a problem if the tax on the gift aid is more than the tax "paid" by the individual.

 

Thanks (0)
avatar
By carolynlancaster
17th Nov 2010 11:06

Question about Gift Aid

I was wondering exactly the same question as this isn't clear from HMRC Gift Aid web site info.  I called the Charities help line and was told that the tax on dividend income couldn't be used for Gift Aid relief.  the person I spoke to implied this could be provided in writing if required.  So, is the software wrong or not?? 

PS as usual, accountingweb tremendously helpful for so many questions that crop up ...

 

Thanks (0)