You may receive a tax bill if you donate to charity under the Gift Aid scheme
Gift Aid is a great incentive if you want to donate to charity and is worth a great deal to the charity sector. But it seems that HMRC are going to take the joy out of giving and send you a bill for your good deed. Another bill? I hear you ask, so what exactly does that mean for you?
If your income mainly consists of dividend income and you make charitable donations under Gift Aid, you will be responsible for making up the difference between the tax you deduct from charitable donations and the tax you have paid to HMRC if there is a shortfall.
It doesn’t seem fair that those with modest incomes and a generous heart will be presented with an unexpected tax bill conjured out of thin air! This may also affect how many donations charities will receive in general which I hope will not be the case.
If you think that you may be affected by this or would like to discuss the new dividends tax rules in general, speak to an AIMS Accountant who will take you through the new procedures.