Charitable contributions - altruism or self-interest?

[LisaContractorUmbrella]

How Tony Blair could benefit from gifts to his own charities - Telegraph

A source at HM Revenue & Customs says: “It is perfectly legal [but] people are, effectively, using the mechanism of the tax system to make a contribution to a charity of their choice, while ignoring their responsibility to the state. c:nazi:
“People claim they want to do things out of the goodness of their own heart, but you cannot expect UK Plc to subsidise them. The claim that charities spend the money better than the state is absurd. The reason we have a welfare state is because charities cannot cope.”

[d000hg]

The reason we have a welfare state is because charities cannot cope on the money people give voluntarily

FTFY. The WS allows the government to force people to give $billions every year so it's crazy to say the difference is about how well the money is used, without remembering the difference in how much each side has.

[NotAllThere]

If that's how the government feel about it, they should scrap gift-aid.

AFAIK, people don't give to charity to avoid tax. The amount of net income remains the same, doesn't it, so as a tax avoidance measure it's pretty crap.

[malvolio]

If that's how the government feel about it, they should scrap gift-aid.

AFAIK, people don't give to charity to avoid tax. The amount of net income remains the same, doesn't it, so as a tax avoidance measure it's pretty crap.

No it isn't. Suppose you sent £1m to an Albanian charity concerned with widget manufacture. That enables them to buy a modern widget lathe. You just happen to be able to supply one at a very reasonable £1m. So you get the tax relief on the donation then a payment to cover the cost of the original donation. End result is we - UK taxpayers - have just given you £200k for free.

[LisaContractorUmbrella]

No it isn't. Suppose you sent £1m to an Albanian charity concerned with widget manufacture. That enables them to buy a modern widget lathe. You just happen to be able to supply one at a very reasonable £1m. So you get the tax relief on the donation then a payment to cover the cost of the original donation. End result is we - UK taxpayers - have just given you £200k for free.

So then it's not giving to charity that's the problem - it's unscrupulous b****ds using the face of a charity to cover dodgy dealings - perhaps UK PLC wouldn't have such a problem with it then if UK donations had to be with UK registered charities?

[Wanderer]

No it isn't. Suppose you sent £1m to an Albanian charity concerned with widget manufacture. That enables them to buy a modern widget lathe. You just happen to be able to supply one at a very reasonable £1m. So you get the tax relief on the donation then a payment to cover the cost of the original donation. End result is we - UK taxpayers - have just given you £200k for free.

Umm, yes but you've just given away £1 million worth of goods. I don't think that's such a great way to avoid tax but go right ahead.

As NotAllThere says - the government can just scrap gift aid if they don't like it but of course that will take a load of money out of the penny jars of the charities and give it to the government which will be very popular.

[malvolio]

Umm, yes but you've just given away £1 million worth of goods. I don't think that's such a great way to avoid tax but go right ahead.

No, you've just earned £200k for free. You own the charity so you still own the goods. And the revenue they bring in.

[v8gaz]

Umm, yes but you've just given away £1 million worth of goods. I don't think that's such a great way to avoid tax but go right ahead.

As NotAllThere says - the government can just scrap gift aid if they don't like it but of course that will take a load of money out of the penny jars of the charities and give it to the government which will be very popular.

What makes you think he's really going to give aay a million pound lathe? I suspect that the cost price is probably nearer 10k, but if you want to send them a million pound lathe, go right ahead

[NotAllThere]

These abuses are more to do with the lack of controlling of charities than tax avoidance. The instance you cite may even be legal, but is of dubious morality - similar to what governments do with overseas aid.

However, if Mr Rich Bloke gives a million to Oxfam - why shouldn't Oxfam benefit from the gift aid on that? The articles I've read seem to be portraying this kind of altruism as somehow wrong.

Should the alzheimer's charity to which Terry Pratchett gave £1M to not benefit from gift aid, simply because he suffers from alzheimer's and so could benefit from it himself?

But anyway- what's wrong with tax avoidance?

[bobspud]

Every penny removed from state control is a penny better spent. Its time that we tendered to remove the whole civil service.

Anyone that has spent any time near a civil servent with budget responsibility will tell you that for the most part they should not be trusted to buy stuff at the local sandwich shop let alone complex IT systems.

Personally I think we would benefit greatly by removing 80% of what the state does today and limiting tax take to no more than 30k per person and 20 million per corporation.

whole offices like BIS/ODPM and Food standards / MAF could just go.