SAM110200 - Repayments: issue repayment: repayment donated to charity (facility withdrawn for all tax years from April 2012)
The facility to make repayments to charity will be withdrawn from April 2012 for all tax years. From this date, although earlier years returns will still show the relevant boxes, the functionality will be removed and any repayment requested to go to a charity will be sent to the customer instead.
Charitable Giving through SA
For 2007-08 onwards, the Giving your tax repayment to charity page with the Main Tax Return (SA100) must be completed in order for the taxpayer to donate all or part of their SA repayment to charity. This option is only available to individual taxpayers, not partnerships, trusts or estates.
Notes:
| 1. | This option was at Question 19A on the Main Tax Return for the years 2003-04 to 2006-07 |
| 2. | For the Short Tax Return (SA200), the option to donate a repayment to charity is part of the body of the return at Question 12 |
Repayments to be donated to charity can only be made automatically through the SA return at the time of capture. Repayments cannot be donated to charity using the clerical function ISSUE REPAYMENT FROM OVERPAID BALANCE.
The remainder of this subject is presented as follows
Completion of tax return
List of charities participating in the Charitable Giving scheme
Charity codes
Gift aid
Repayment
Repayment notification
SA record
Rejected repayments
Completion of tax return
If the taxpayer wishes to donate their repayment to charity they will complete either box 3 or box 4 of the Giving your tax repayment to charity page, and then complete other boxes as appropriate.
Box 3
This box should be ticked where the whole of the repayment is to be donated to charity. This amount donated will be the final amount to be repaid after taking into account any under or overpayment already on the record and not the overpayment for the year that may have been self calculated.
Box 4
This box is completed where part of the repayment is to be donated to charity and a specific amount must be entered in this box.
Where the amount specified is more than the amount of the overpayment available for repayment, the donation to charity will be limited to the amount of the overpayment (including any RPS).
Box 5
The 'charity code' for the chosen charity must be entered here.
Box 6
This box is ticked if the taxpayer wishes to 'Gift Aid' their donation.
Box 7
This box is ticked if the taxpayer has given their permission for their name and address to be passed onto the charity. If this permission is not given, the donation will remain anonymous.
List of charities participating in the Charitable Giving scheme
Each charity wishing to participate in the scheme must register with Charity, Assets and Residence (CAR) and will be allocated a unique charity code which will be used by the taxpayer when donating their repayment to their chosen charity.
The list of charities participating in the scheme and their codes are available on the Intranet by visiting http://hocan.inrev.gov.uk/ppgcar/working/charities/search.htm.
Charities can decide to join the scheme or opt out at any time during the year. But the list will only be updated every three months 1 June, 1 September, 1 December and 1 March, so charities will only be added or removed from the list at the next update following notification to CAR.
At the time the return is captured, the charity must be shown on the latest version of the list of charities participating in the scheme in order for a repayment to be donated to that charity.
Charity codes
The code allocated to each charity will be a seven character alphanumeric code made up of three alpha characters, two numbers and two further alpha characters. The last alpha character in every code will be 'G' and box 5 on the Giving your tax repayment to charity page of the SA return will be already populated by this character. An example of the format of a valid code is 'AAA99AG'.
The charity code will be checked by LDC to ensure that it is in a valid format. If the code is not in a valid format, it will not be possible to send the repayment to charity. In these cases the entries in this section will be disregarded and the repayment issued to the taxpayer.
If the charity code is in a valid format, the completed boxes will be fully captured. But if the code does not relate to any charity currently participating in the scheme, it will not be possible to send the repayment to charity. In these cases the SA system will automatically issue the repayment to the taxpayer.
Where the charity code is valid but does not relate to a charity currently participating in the scheme and part of the repayment is to be donated to charity and the remainder to a nominee, the total repayment will be inhibited and a work item created on the W030 'Inhibited Automatic Repayments' work list for clerical review.
Gift aid
The taxpayer can also elect on the return to 'Gift Aid' their donation. This enables their chosen charity to receive basic rate tax back from Charity, Assets and Residence (CAR) on the amount donated.
The SA repayment system will issue a list to CAR every month showing all the donations made in that month and to which charities. It will also identify those donations where the taxpayer has indicated that Gift Aid should be applied. This will enable CAR to make repayment of basic rate tax to all the relevant charities without the need for each charity to make a specific claim.
Repayment
In this context 'the repayment' is the final amount to be repaid after taking into account any under or overpayment already on the record and not the return overpayment for the year.
Where only part of the repayment is to be donated to charity, if the amount specified is less than the final amount to be repaid, the donation to charity will be restricted to that amount.
The limit of £10 or more for the issue of an automatic repayment does not apply to repayments donated to charity. Repayment of less than £10 donated to charity will be issued automatically.
All repayments donated to charity will be issued direct to the charities' bank account by BACS.
If there are any inhibitions on the record it will not be possible to send the repayment to charity. In which case the repayment will be inhibited and a work item created on the W030 'Inhibited Automatic Repayments' work list for clerical review.
Repayment notification
The charity will receive a repayment notification R1000(CS) showing the amount of the donation and whether Gift Aid applies. The notification will only show the taxpayer's name and address if the taxpayer has given us their permission at box 7 to pass this information on to the charity.
The taxpayer or capacitor and agent (where 64-8 held) will also receive a repayment notification to confirm that the repayment has been donated in accordance with their instructions.
In cases where it has not been possible to issue the repayment to charity, a letter or Customer Service Message will also be issued to the taxpayer. This excludes cases where the repayment is issued automatically to the taxpayer by the SA system.
SA record
Where the whole of the repayment is donated to charity, the repayment will be shown on the statement as normal and the details of the repayment can be viewed through VIEW REPAYMENT.
Where part of the repayment is donated to charity and the remainder to the taxpayer or a nominee, the two repayments will be shown separately on the taxpayer's statement. These can be viewed individually through VIEW REPAYMENT by selecting the required statement line.
Rejected repayments
Where a repayment donated to charity is rejected by BACS because there is a problem with the bank account number, sort code or both, the repayment will appear on the W029 'Rejected Repayments' work list. These repayments should be dealt with in accordance with the guidance in the 'Repayment Work Lists' section of the SA Manual.
Where a repayment donated to charity is accepted by BACS but goes on to be rejected by the receiving bank because there is no open account for the number quoted, the repayment will be returned by the bank to HMRC Finance. These repayments do not appear on the W029 'Rejected Repayments' work list.
On receipt of the returned repayment, HMRC Finance will check the SA record to ensure that the repayment has not already been cancelled in error by the local office or a credit obtained to reissue the repayment because it was reported 'missing' by the taxpayer. If neither of these scenarios apply, HMRC Finance will cancel the BACS repayment on the SA record. In all cases HMRC Finance will notify the office responsible for the processing activities in order that they can contact the taxpayer for further repayment instructions as necessary.
