just finishing off the self assessment for a client (my last one!) and I must be getting exhausted (but Jans almost over now) as their question relates to a freind of theirs whose accountant allows them to treat donating their time as charitable giving.
Now, bear with me here as I can see their logic although I believe it to be flawed and wonder what your opinions are.
If they gave £500 of their time but did not take the money they would consider that as giving to the charity.
My argument is that they are simply missing a step in that what is really happening is that they are doing £500 worth of work, the charity pays them for the work and then they give the money back again which is then a charitable donation for which the charity can claim the tax.
As far as the business books go it is still that they have done £500 worth of work and that value of work will go into the tax calculation.
I've said that HMRC do not give their own money to charity but they will pass on money that has been given to them.
Taken to its extreme this is like taxpayers deciding whether they want to give their money to HMRC or to charity... I just can't imagine HMRC going for that can you?
Has anyone ever heard of similar charity schemes to this or is this as I suspect one taxpayer not understanding what their accountant is doing but think that they do and is spreading it to other taxpayers (including my client) as fact? (or my mate down the pub syndrome as its also known).
Many thanks,
Shaun,
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I wish I was on my last tax return!
This sounds like a total misnomer to me, no invoice has been raised and no intention of charging for the work, therefore there is no need to put £500 into the tax computation and since no monetary donation has been give then no gift aid would be claimed (of course only really an issue to the tax payer if he/she is higher rate payer).
Cheers fella's, we definitely seem to be of a like mind on this.
At the start of Jan I wouldn't even have asked that but I think that a month of missing bank statements and invoices and receipts (or too many of each!) has worn down my elusive grip on reality to the point where the line "but my mates accountant says that..." doesn't earn the automatic rejection that it should.
Good luck to you both getting everything completed by the 31st. This may be my last one but I can't see it being completed before Wednesday as I've had to rebuild two years books to get to here.
Talk later mateys,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
