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Where Taxpayers and Advisers Meet

Gift Aid carry back

Bangoreye66
Posts: 5
Joined: Thu Aug 03, 2017 12:29 pm

Gift Aid carry back

Postby Bangoreye66 » Thu Nov 28, 2019 9:42 pm

Hello All.

I am not optimistic, but any observations and wisdom are welcome.

A taxpayer now knows that her financial position is secure, after a bumper income year in 2018/19.

She wants to make a Gift Aid donation now (i.e. 2019/20), but relating it to 2018/19, when her tax rates were highest.

Unfortunately, she submitted her 2018/19 tax return months ago - the filing deadline has not passed, but the tax return has been processed.

Is there any facility at all to relate a donation back after the tax return in question has been submitted?

Many thanks,

TG

darthblingbling
Posts: 290
Joined: Wed Aug 02, 2017 9:09 pm

Re: Gift Aid carry back

Postby darthblingbling » Thu Nov 28, 2019 9:49 pm

File an amended return?

Bangoreye66
Posts: 5
Joined: Thu Aug 03, 2017 12:29 pm

Re: Gift Aid carry back

Postby Bangoreye66 » Fri Nov 29, 2019 2:53 am

Thanks Darthblingbling, but the rules indicate the claim can't be on an amended return.

darthblingbling
Posts: 290
Joined: Wed Aug 02, 2017 9:09 pm

Re: Gift Aid carry back

Postby darthblingbling » Fri Nov 29, 2019 8:05 am

While the wording makes it look that way, I'm fairly sure that if an updated return is submitted before the normal filing deadline then it will be OK.

darthblingbling
Posts: 290
Joined: Wed Aug 02, 2017 9:09 pm

Re: Gift Aid carry back

Postby darthblingbling » Fri Nov 29, 2019 8:45 am

An election must be made—
(a)on or before the date on which the individual delivers a return for year P under section 8 of TMA 1970 (personal return), and
(b)not later than the normal self-assessment filing date for year P.

ITA2007 s426(6)

Nothing in the above legislation, in my opinion anyway, would prevent an updated 2018/19 return being filed before 31 Jan 2020 that contains the election. Assuming she files electronically that is.

However, it appears that this has been challenged at the tribunal in John Cameron v CRC which found in HMRC's favour. So on the face of it you are right.

Not sure what the will of parliament was when they drafted the legislation.

pawncob
Posts: 4386
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Gift Aid carry back

Postby pawncob » Fri Nov 29, 2019 12:44 pm

Submit the amended return. Challenge HMRC's decision if they reject it.
With a pinch of salt take what I say, but don't exceed your RDA

someone
Posts: 384
Joined: Mon Feb 13, 2017 10:09 am

Re: Gift Aid carry back

Postby someone » Mon Dec 02, 2019 4:37 pm

Submit the amended return. Challenge HMRC's decision if they reject it.
Unfortunately, if you're planning to make a gift based on the net costs to yourself you need to know what the effective tax rate would be.

e.g. you want to make a net 10K gift.

If the tax relief is 40% then you should give 13333 - the charity reclaims 3333 and you reclaim 3333 meaning you have 10K less in your bank account.

If the tax relief is 20% then you should give 10000 - the charity reclaims 2500 and you reclaim nothing.

Safest would probably be to give 10K and submit the amended return. If the claim is not rejected then gift the additional 2500 you reclaimed in another tax year. The charity will get 15333 instead of 16666 but you're at no risk of paying out more than you intended.


The moral of this story is to never submit your tax return until the last possible date...


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