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Gift aid donation and pension contribution.

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Gift aid donation and pension contribution.

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by Tax Tutor.
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  • September 3, 2015 at 5:59 pm #269725
    Abdulqayyum
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    How do you treat the two when from net income and when made from gross salary?

    September 4, 2015 at 11:50 am #269823
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Have you read OT notes chapter 2 section 5 on Gift Aid and chapter 10 section 1 Types of Pension Scheme and listened to lectures??
    Gift Aid payments never reduce the taxable income on the income tax computation but are deducted gross in deriving ADJUSTED Net Income and also extend the basic and higher rate band limits in the calculation of tax liability.
    To deal correctly with pension contributions you need to know whether they are made under an occupational scheme or personal pension scheme?!
    Occupational pension scheme contributions are paid gross and deducted from employment income whereas personal pension scheme contributions are treated the same way as gift aid payments.
    Note that charitable contributions made under the payroll deduction scheme are treated the same way as the occupational pension scheme contributions.

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