My client has made £3,662 in charitable donations in 2014/15.
She is self employed (and had a small amount of employment income) so her taxable income was £3,166. Therefore tax liability of £633.
On her tax return I have included her charitable donations and it has therefore grossed them up to increase her basic rate band, but also charged her tax. I am guessing this is because she has not paid enough tax to qualify for full gift aid, but I can not understand the workings!! Please can some clarify the below:
Copy of her tax calculation:
Taxable income £3,166 - tax £633.20
Tax on gift payments £4,577 - tax £915.00
Deducted at source £220.00
Tax Liability £695.00
This doesn't even add up! What am I missing here?!
Any help would be much appreciated.