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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Gift Aid
Dear Tutor,
I have been wondering about this area, is it not possible that if one was extremely kind and gave away the majority of their income that in fact the 20% that the government gives to the charity is actually far more than the sum of all the tax you have paid previously?
I realise that this is very unlikely to happen but it sparked my curiosity. For example, say that I won the lottery and as many do (still went to work to keep myself busy) and gave the vast majority of my income to Water Aid for example. This would mean that, as the years roll by, the government would be paying significantly more to my charity than they will ever get back in taxes from me.
This is a very good question. If you have not paid enough tax to cover the twenty percent that goes to charity – HMRC will issue you with a tax demand to collect the tax shortfall
Hope this helps