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 Post subject: Tax rules
PostPosted: Mon Nov 09, 2009 10:12 am 
I'm pretty ignorant about the tax system. As OH is a banker (risk free banking - there is such a thing) I have zoned out everything financial as it bores me to tears! So how does this it work in relation to giving or even if we were to start it now? I assume we don't save any money but if it was going somewhere that I wanted it to go I'd rather that. Would schools be exempt and will the schools know who the payment has come from?


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PostPosted: Mon Nov 09, 2009 10:42 am 
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Last edited by Loopyloulou on Tue Aug 09, 2011 2:29 pm, edited 1 time in total.

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 Post subject:
PostPosted: Mon Nov 09, 2009 10:49 am 
Ok, so the charity can claim back the tax you would have paid but is the giving out of your already taxed income? So if someone earns £20k and gives £1k to charity (silly figures, I know) do you then get taxed at £19k or do you get taxed at £20k then you give the £1k and the charity can claim?


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PostPosted: Mon Nov 09, 2009 10:53 am 
Would be interesting if the government are forcing the schools to do extra to keep their charitable status but then not letting them have gift-aid because they do not deem them as a proper charity. But then double standards always prevail! :roll: I bet these schools wish they had never turned themselves into charities now. There are a couple of well-known preps that aren't charities and they must be thanking their lucky stars!


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PostPosted: Mon Nov 09, 2009 10:54 am 
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I think if you give the school £1,000 then it claims £200 from the Treasury :D :D and you get Taxed on £18,800 :D :D :D :D .

Or something like that. Where is FTB when we need him?

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 Post subject:
PostPosted: Mon Nov 09, 2009 11:09 am 
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Location: Wales
I've been wondering about similar:

If a business chose to 'give' say £10k a year to a 'charity' <cough> school where one of their consultants' DC attend rather than pay the consultant a fee, would that be allowed and would there be any benefit for the consultant, tax wise?

Thinking out loud: The business would 'win' because it could offset tax against a charitable donation and the consultant would win because the £10k would represent his DC school fees. Is there a way the school would win too?

I don't know . . . I'm not an expert by a long way. Does anyone know?


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PostPosted: Mon Nov 09, 2009 11:10 am 
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Location: Berkshire
I would have thought that anything you pay over must be out of taxed income, so if you earn £50000 gross, and take home a net of £35000 (say) it is out of this £35000 you'll be giving your £1000, so you wd have had to earn approx £1500 to pay the £1000 and the school can claim the 20% back as gift aid


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 Post subject:
PostPosted: Mon Nov 09, 2009 11:13 am 
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Location: Berkshire
Freya wrote:
If a business chose to 'give' say £10k a year to a 'charity' <cough> school where one of their consultants' DC attend rather than pay the consultant a fee, would that be allowed and would there be any benefit for the consultant, tax wise?

Thinking out loud: The business would 'win' because it could offset tax against a charitable donation and the consultant would win because the £10k would represent his DC school fees. Is there a way the school would win too?

I don't know . . . I'm not an expert by a long way. Does anyone know?


Not sure about the business angle, although I wd have thought that only certain kinds of donations could be offest against tax but this would certainly be a benefit for the employee, and I think the cash equivalent would be taxed

Edit to say...I am an accountant but not a tax expert, so am happy to be wrong


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 Post subject:
PostPosted: Mon Nov 09, 2009 12:29 pm 
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T.i.p.s.y wrote:
Ok, so the charity can claim back the tax you would have paid but is the giving out of your already taxed income? So if someone earns £20k and gives £1k to charity (silly figures, I know) do you then get taxed at £19k or do you get taxed at £20k then you give the £1k and the charity can claim?


taxed on 20k
pay out 1k out of taxed income and then charity can claim back the approx 27.5% tax you have paid

... 27.5ish% because for every £1 of taxed income you give - you would have had to earn about £1.27 -


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 Post subject:
PostPosted: Mon Nov 09, 2009 1:01 pm 
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...that can't be the whole story though herman, because next year for every pound we give we'll need to receive income of £2, and the school only gets basic rate tax back but my accountant has assured me that I'd get the rest leaving the government without a penny :twisted: .

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