I recently noticed a change to the Tax Treatment of Charitable Donations in Ireland and I thought I would share it here as most charities seem to be still using an incorrect (or confusing) form on their websites and this blogpost includes text taken from an email that I just received from the Revenue Charity Claims Section.
Did you know that ‘If you are a taxpayer, (PAYE or self-employed) and gave €250 or more to a Registered Charity during 2013, that the Charity can claim back the tax you have already paid on your donations from the Revenue. This includes any payments made via MyCharity.ie (the website for raising money for Charities in Ireland). This means that a donation of €250 would actually be worth €362.32 – that’s an additional €112.32 (at the higher rate of 41% tax) [Did you know that one reason that our local church uses the Envelope with your name on it is that this scheme also applies – you need proof that the aggregate amount of donations is €250 or larger hence the need for the envelope].
Change to Tax Treatment from 2013
In relation to any donations made to an eligible charity or approved body in 2013 (444 page pdf from Revenue of Bodies with Charitable Tax Exemption) and subsequent years, it is the charity that can claim tax relief on the donation irrespective of whether the donor is a PAYE or Self-Assessed Taxpayer.
Please note that a CHY3 (Enduring Cert) or a CHY4 (Annual Cert) are the proper certificates that donors should complete in relation to donations made in 2013 and onwards. Full list of forms available on Revenue website.
You can still use the CHY2 Cert for donations made by PAYE ONLY taxpayers in 2010, 2011 or 2012.
The old situation
An individual taxpayer used to be able to reclaim the tax relief on charitable donations for themselves – this was an attractive benefit of giving to charity. They could also elect to give the Tax Relief to the Charity – I imagine that a lot of people did this.
When I signed up to give €25 a month to a particular charity last year, I was told that as a self employed person that I could not avail of the option to give the tax relief to the charity at the end of the year [I am not sure if that information was accurate at that time but no reason to think that he was wrong as PAYE ONLY is written on the old forms].
How to process your Tax Relief
You don’t really need to worry about this change as Your charity will send you the form which you need to return to them. Most should be on the ball and should send you CHY4 for 2013.
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