TAX REFUND REDUCED BY CHARITY DONATION ??

[DirectDevil]

Just came across something new.

Submitted tax return for 2014. Had about €600 gross in unrecovered medical expenses.

Lucky enough to be able to make a donation of €250 during year 2014 to a qualifying or approved charity registered with Revenue.

There was a note on the P.21 to indicate that any tax refund could be reduced on account of donations to approved charities. As it happened, there was no problem this time and I received the appropriate refund.

Is it possible in future years that Revenue could reduce a tax refund because I donated to charity ? How can this happen ? I would love to know the answer so that I don't fall foul of whatever rule covers this ?????

 

[Brendan Burgess]

The rules changed for donations after 1 Jan 2013.

So I suppose
1) If you paid €2,000 in tax
2) Your donation earned the charity €1,500
3) You subsequently applied for a tax refund of €1,000

If they gave you a refund of €1,000, your net tax would have been €1,000.
It cost them €1,500 in tax relief to the charity, so they would give you refund of only €500

I would doubt it ever arises in practice.

Brendan

 

[Joe_90]

In 2014 you were not entitled to claim a donation to charity.

The charity gets the relief not the individual.

 

[DirectDevil]

In 2014 you were not entitled to claim a donation to charity.

The charity gets the relief not the individual.

I'm slightly confused by this .

In 2014 I gave €250 to a charity registered/approved by Revenue and signed the relevant CH?? form. Is there a problem with this ?

I have always understood that the relief goes to the charity as you say.

 

[Joe_90]

Apologies I took it that you were trying to claim the deduction in your tax return.

If it transpired for whatever reason you did not have a tax liability for the year of the donation then the Revenue would seek the tax back from the Charity.

 

[Jon Snow]

I'm slightly confused by this .

In 2014 I gave €250 to a charity registered/approved by Revenue and signed the relevant CH?? form. Is there a problem with this ?

I have always understood that the relief goes to the charity as you say.

This isn't complicated.

If you give the charity €250, Revenue give them the referable amount OF YOUR TAX.

That means there's this much less OF YOUR TAX available for you to claim a repayment of when you file a claim for medical expenses etc...

Extremely unlikely to arise in practice, unless it's a person who is living off savings or something similar (very low income & income tax bill, but yet enough money to donate to charity).

 

[DirectDevil]

Thanks all for the replies. Situation now clear.