Carry back gift aid donations
For a number of years, it has been possible to make gift aid donations and carry them back to the previous tax year. This is a useful tax planning facility if earnings were higher in the previous year, and in some cases it may mitigate loss of personal allowances and tax at higher rates.
There are, however, two conditions that need to be complied with:
- Firstly, you cannot claim to carry back gift aid donations once you have submitted your tax return for the current year. Consequently, if it would be beneficial to carry back gift aid contributions you have made since 5 April 2016, as if paid during 2015-16, you will need to make the claim when you file the 2015-16 return. This means that the latest date to action this type of claim is 31 January 2017.
- Secondly, you will need to have paid enough Income Tax or Capital Gains Tax in the earlier year to cover the tax that the charities reclaim on those donations.
For higher rate tax payers, especially those with taxable income in excess of £100,000 this strategy is a useful device to reduce tax payments in a year by utilising transactions made after the end of the tax year. In fact, this is the only readily accessible carry-back planning tool available to most tax payers.
- HMRC issues VAT guidance to help overseas sellers - March 30, 2023
- Crack your Easter childcare costs with tax-free top-ups - March 28, 2023
- Ready for the new tax year? Follow our tips - March 22, 2023
- Chancellor targets business growth in Spring Budget - March 20, 2023
- Budget summary 15 March 2023 - March 16, 2023
- Leaving your business? Why you should plan an exit strategy - March 10, 2023
- Thinking of ditching the 9-5 and going self-employed? - March 8, 2023
- Why close a limited company - March 7, 2023