Document confirms that money claimed under Gift Aid will be considered part of a donation
The government announced in last month’s Budget that, from April next year, any donor giving more than £50,000 a year or a quarter of their income, whichever is higher, will not be able to reclaim all the tax they have paid on their donations.
The guidance confirms that the government believes donors should pay tax on sufficiently large donations.
"Some individuals on very high incomes have used reliefs to pay little or no tax, sometimes year after year," it says.
"This government believes it is not right that taxpayers with very high incomes should, year on year, pay little or no tax as a result of unlimited reliefs."
The new guidance confirms that any money claimed by the charity under Gift Aid will be considered part of the donation.
This means that, in practice, a donor earning £200,000 or less who gives anything over £40,000 could be affected by the cap, even if they claim no other tax reliefs.
HMRC also confirmed that any Gift Aid claimed by the charity would be subtracted from the amount a donor could claim under the cap.
If a donor gave so much that Gift Aid was more than the total tax relief they could claim under the cap, they would have to pay back the tax claimed by the charity
Karl Wilding, head of research at the National Council for Voluntary Organisations, tweeted: "The most unhelpful clarification document ever written? Desperately disappointing."