Trivial mistake on return

[melonfool]

For Gift Aid to be claimed on admissions, one of the following two conditions must be met:

1) The museum can request a voluntary donation worth 10% or more than the normal admission price. This must be clearly identified to the visitor as a voluntary donation and signs should show both amounts. So a general ticket could be £10, but a gift-aid ticket must be a minimum of £11, which is worth £13.75 to the charity after the tax claim.

Or

2) A donation is made in return for the right of admission to the property for a 12 month period at all times when the property is open to the public, excluding five days per year permitted for special events. This can mean either unlimited free entry or reduced price entry for all visits during the 12 month period. In the latter case, only the fee paid on the first visit qualifies for Gift Aid.

Neither was the case with my ticket. It was a single entry Adult 60+ ticket of £6 inclusive of 90p VAT (I can't even make that work...) to an exhibition in the Natural History Museum. Referred to on the ticket as a "Jerwood Event (A)"

Gift Aid is shown as added at 0.00 giving a total payment of £6.00 + £0.00 = £6.00

The second (bottom) half of the ticket shows:
Jerwood Event (A), Grp(?) A, Qty 1, £15.1x - this is now indistinct.
Gift Aid Grp(?) A, Qty 1, £10

XFool's name (incorrect)
XFool's address (correct)

"Thank you for your Gift Aid donation received today. Your donation will support our valuable work. Gift Aid donors must pay an amount of income Tax and/or Capital Gains Tax equal to...etc"

Wording not entirely clear now. Mainly because even originally the text overran the sides of the ticket.

I suspect it's an incorrectly printed ticket - the fact it has a different name on is a clue, they have mixed you up with someone else and you did not make a £10 Gift Aid donation.

Forget about it.

And forget the £1 you owe HMRC!

Mel

[Gengulphus]

And forget the £1 you owe HMRC!

Especially as it's not even £1 - it's the tax on an extra £1 of income!

Gengulphus

[melonfool]

And forget the £1 you owe HMRC!

Especially as it's not even £1 - it's the tax on an extra £1 of income!

Gengulphus

Oh, yes, of course - so 40p.

I was of the understanding that HMRC did not bother itself with sums under whole pounds.

However, if I ever get them to accept the money I owe them, as a gesture of goodwill and to clear everything up, I will add 40p to it.



Mel

[XFool]

And forget the £1 you owe HMRC!

Especially as it's not even £1 - it's the tax on an extra £1 of income!

Gengulphus

Oh, yes, of course - so 40p.

Well I make it £1.20!

Being the difference between 40% Tax Rate and 20% Tax rate (i.e. 20%) of £6. Or have I got that wrong too?

I was of the understanding that HMRC did not bother itself with sums under whole pounds.l

Quoting from my Notice of Coding, December 2017:

"Less Adjustment for tax you owe (earlier year) £2 -- Go to note 6"

"Note 6 -- Tax you owe (earlier year) We previously told you that you owe £0 tax from an earlier tax year. We have therefore included an adjustment to reduce your tax-free allowance by £2 so we can collect the £0 tax in equal instalments. To make sure you pay the £0 by 5 April 2018, we will increase the amount of tax deducted from your wage, salary or pension."

[melonfool]

Especially as it's not even £1 - it's the tax on an extra £1 of income!

Gengulphus

Oh, yes, of course - so 40p.

Well I make it £1.20!

Being the difference between 40% Tax Rate and 20% Tax rate (i.e. 20%) of £6. Or have I got that wrong too?

I was of the understanding that HMRC did not bother itself with sums under whole pounds.l

Quoting from my Notice of Coding, December 2017:

"Less Adjustment for tax you owe (earlier year) £2 -- Go to note 6"

"Note 6 -- Tax you owe (earlier year) We previously told you that you owe £0 tax from an earlier tax year. We have therefore included an adjustment to reduce your tax-free allowance by £2 so we can collect the £0 tax in equal instalments. To make sure you pay the £0 by 5 April 2018, we will increase the amount of tax deducted from your wage, salary or pension."

No idea - but I was working on 40% of the £1.08 you said you left off your return, on the basis you said HMRC charged you the higher rate.

Maybe they have changed the £1 thing. Now it's all electronic it probably doesn't matter to them any more, this was some years ago when I suspect chasing a cheque for small amounts was really not worth it. In the old days at Boots we would not allow anyone to put in expense claim for less than £15 due to the cost of processing it (i.e. they had to get it from petty cash in the store, or add it to the next claim if they were likely to have one).

Mel

[Gengulphus]

And forget the £1 you owe HMRC!

Especially as it's not even £1 - it's the tax on an extra £1 of income!

Oh, yes, of course - so 40p.

I was of the understanding that HMRC did not bother itself with sums under whole pounds.

That's a slightly tricky point. The paper version of the tax return itself give general instructions for taxpayers to round to whole pounds (in the direction that is in the taxpayer's favour, e.g. downwards for income, upwards for expenses), on page TR1 (page 3 of the pdf), and the online system automatically does that rounding for you - e.g. if you enter an income item of £567.89, it will change it to £567; if you enter the same for an expenses item, it will change it to £568.

But the paper version of the tax calculation notes, which include a Working Sheet to allow one to work though the tax calculation oneself, do not have the same general instructions - only (as far as I can easily tell by searching it for the words "round" and "whole") specific instructions about Gift Aid and student loan repayments, on pages 17 and 26, and the tax calculations produced by the online system do include non-zero numbers of pence, e.g. when applying a tax rate of 20% or 40% to an amount of income that is not a multiple of £5.

So as far as I can make out, the £1.08 of extra interest income in the OP would probably result in the amount of interest income one should report increasing by £1 (but it might be £2 if other interest income totalled an amount whose pence are 92p-99p), which at a tax rate of 40% would result in a tax bill increased by 40p (or it might be 80p).

It is of course also a very pedantic point! The only reason I know it is that I have various consistency checks in the spreadsheets I use to track my tax situation, that are really there to guard against input errors, and it's rather easier to write those checks on the basis that there is a single correct answer, rather than a range of correct answers depending on exactly what one decides to round and in which direction. So some years ago, I put a bit of effort into digging into exactly what the HMRC instructions said to do and what the online system actually does...

Gengulphus

[AleisterCrowley]

From memory (and I may well be wrong) you can round in your favour in the input boxes (automatic online) but sub tables such as list of savings accounts interest payments (there for convenience only) need to use full amounts with only the total being rounded i.e. the amount in your favour in any box cant be more than 99p

[XFool]

So as far as I can make out, the £1.08 of extra interest income in the OP would probably result in the amount of interest income one should report increasing by £1 (but it might be £2 if other interest income totalled an amount whose pence are 92p-99p), which at a tax rate of 40% would result in a tax bill increased by 40p (or it might be 80p).

Actually thinking about it - and using that £6 Tax Aid rather than anything else - the excess tax paid would presumably be on the Dividend Tax, so the difference between 32.5% and 7.5% Dividend Tax. i.e. 25% of £6 = £1.50. Because the £6 GA would lift the threshold by that amount.

If BRT on the exact interest sum of £1.80, then 36p owing. And about 40p excess tax paid in a preceding year (£2 Tax Allowance adjustment).

Online, all the electronic records and figures are littered with mysterious calculations based on such nominal sums.

Anyway, thanks for all the comments. Perhaps I'll just forget about the whole thing.

[Gengulphus]

So as far as I can make out, the £1.08 of extra interest income in the OP would probably result in the amount of interest income one should report increasing by £1 (but it might be £2 if other interest income totalled an amount whose pence are 92p-99p), which at a tax rate of 40% would result in a tax bill increased by 40p (or it might be 80p).

Actually thinking about it - and using that £6 Tax Aid rather than anything else - the excess tax paid would presumably be on the Dividend Tax, so the difference between 32.5% and 7.5% Dividend Tax. i.e. 25% of £6 = £1.50. Because the £6 GA would lift the threshold by that amount.

Probably the right answer, but not really the right reason - the Gift Aid of £1.50 reclaimed by the charity is 25% of the amount of the £6 donation, who obviously cannot match it to any particular item of your tax. Neither do you in your tax return, nor does your tax calculation do so in any easy-to-describe way - it just:

* Expands your basic-rate band by £7.50 (125% of the amount of the donation), transferring up to £7.50 of your income taxed at higher rate to being taxed at basic rate (usually £7.50 of it, but could be less if you don't have that much income taxed at higher rate) and if relevant, a similar transfer of income from being taxed at additional rate to being taxed at higher rate. That reduces the tax calculated by the difference between the effective higher and basic rates on the first amount of transferred income, and if relevant by the difference between the effective additional and higher rates on the second amount. How much that amounts to will depend on the details of your particular tax calculation, and it may well differ from £1.50 - e.g. if the transferred income is dividend income and additional-rate tax is not involved, the tax saving will be £1.50 if it is above the 'dividend allowance', but nothing at all if within it.

* Checks close to the end of the calculation that the total of the calculated Income Tax and CGT is at least as much as the total amount of Gift Aid reclaimed by the charity/ies, and if it is instead less, increases it to that amount. This incidentally is one of the places where it's important to understand that there is actually no such thing as "Dividend Tax". It's a convenient shorthand for "Income Tax as it applies to dividend income", but it's only that and it can be misleading when interpreting precise tax rules - e.g. here, "Dividend Tax" is apparently not included in "the total of the calculated Income Tax and CGT", any more than say VAT is, and one needs to know what it's shorthand for to see that it actually is included (and VAT is not, because "VAT" is not shorthand for any form of Income Tax or CGT).

Gengulphus