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Tax Back for MDI
Tax Effective Giving
Muscular Dystrophy Ireland claims thousands of € every year thanks to the tax effective giving process, its simple, its fast it can make a real difference.Any taxpayer who donates €250 or more in a year to Muscular Dystrophy Ireland can allow the charity to reclaim the tax.
How does it work?
If you are a PAYE taxpayer please take a few minutes to read the following:
Changes to the tax relief on donations to charities effective from 1st January 2013.
Key Features of the Revised Scheme:
N.B. The changes summarised below only apply to qualifying donations to eligible charities. [Muscular Dystrophy Ireland is an eligible charity]. There is no change to the Corporate tax relief, companies continue to treat donations as a normal business expense and there is no upper limit on the amount that can be donated.
1: The tax refund for donations from all donors regardless of their tax status (PAYE or Self-assessed) will now go to the charity in all cases at a blended rate of 31%. Charities no longer need to ask donors about their tax affairs and the only reason that a refund claim will be rejected is if the donor has not paid sufficient tax in the relevant year to cover the reclaim or inaccurate details have been supplied.
2: The qualifying donation threshold remains at €250 and must still meet the condition of being given “at arms-length with no strings attached” i.e. there can be no benefit to the donor.
3: The tax relief will now be given at a blended rate of 31% regardless of the rate of tax paid by the donor and this will be on a grossed up basis.
Example: A donation of €250 will be grossed up at 31% as follows: €250*100/69 = €362.32 so the tax refund will be €362.32-€250 = €112.32. On this basis the tax refund on a donation of €500 will be €224.64 and on €1,000 it will be €449.27.
4: An annual limit of €1million per individual can be relieved under the revised scheme and donations under the scheme are no longer subject to the higher earner restriction because the tax refund goes to the charity in all cases, not to the donor.
5: In the case of a donor who is “associated” with the charity (employee, board member, member etc.) the limit for tax relief on donations to a maximum of 10% of annual income continues to apply.
6: Donors can sign the approved certificate/form to cover qualifying donations over a five year period using the new CHY3 “enduring” form or if they prefer for one year using the CHY4 annual form. In each case they are giving the charity permission to claim a tax refund on the donation/donations of €250 or more during the period covered by the form.
7: Each form requires that the donor fills in their PPS number and signs the declaration form which the charity must retain for audit purposes, subject to data protection rules on security. However, renewal of both forms has been made much easier and can be done by donors online, by phone (recorded message NOT a note of the call), by text, email or letter removing the need for donors to send charities signed forms every year. The charity is required to maintain a verifiable record of renewals that may be audited by Revenue at any time.
8: The filing of tax refund claims by charities on all donations from 1st January 2013 will be made using the Revenue Online Service (ROS) beginning in January 2014. All charities that have made tax refund claims under the scheme in the last four years will automatically be issued with a ROS number in the coming months.
Muscular Dystrophy Ireland has formally committed to complying with the Statement of Guiding Principles for Fundraising and donations.