Income Tax Act 2007 section 809ZN

Income tax charge where gift aid is withdrawn

Section 809ZN imposes an income tax charge when a tainted donation is made that would otherwise have qualified for Gift Aid relief, and sets out who is liable for that charge.

• An income tax charge arises when a tainted donation is made in a tax year that would otherwise have qualified for Gift Aid, and the recipient charity is entitled to claim a tax repayment on that donation.
• The tax charged equals the Gift Aid repayment the charity is entitled to claim, regardless of whether the charity actually makes the claim.
• Liability for the charge falls jointly and severally on the donor, any different donor of the tainted donation, each potentially advantaged person under the arrangements, and any charity involved that knowingly participated in the arrangements.
• No charge arises to the extent that the Gift Aid repayment has already been returned to HMRC under any other provision of the Tax Acts, preventing a double charge.