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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3825
Experience:  FCCA FCMA CGMA ACIS
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open garden organizers say the money I take from visitors to

Customer Question

open garden organizers say the money I take from visitors to my garden open days is legally mine but I am obliged to send it all to the open garden organizers and not allowed to use gift aid forms when doing so. Surely if its legally mine I should be declaring it in my self assessment tax return and only sending the remainder after tax to the open garden organizers? The money runs through my current account, £17,000 over 3 years so far. Please can you clarify my position?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
There is no requirement whatsoever for you to send the moneys collected to the open garden organisers unless, of course, there is a contract or some other agreement in place requiring you so to do.
If you are required by agreement to send it to the organisers then it would be an allowable expense against the income received from open gardens activities, thus reducing the element of tax due to HMRC. Gift aid forms are a process where a charity my recover tax from a donation to them; were there minimal net income it would be a dead duck and, in any case, is the open garden activity registered as a charity with the Charity Commissioners?
You are correct in your assumption that the net income should be declared in your self assessment tax return. Please note that I said 'net,' so depending on whether you are operating under an agreement, either written or implied, your liability might be substantially reduced.
I would always advise that you open a separate bank account for this activity, if only for your own protection. I would also recommend that your arrangements in this matter be more formalised for the same reason in the event of an inquiry.
I do hope I have shed some light on your current situation.
Customer: replied 2 years ago.

Hi Keith,

Thank you for your reply, and for proving that I am not being paranoid!

To clarify further, the donation forms I fill in and send with the money state "Thank you for voluntarily donating funds to the XXX. Please note that there is no formal contractual relationship between the XXX and Garden Owners."

If I understand you correctly, this sentence deliberately quashes any implied agreement so the full gross takings would should be declared as personal income and subject to income tax.

This means so far I have been engineered into not declaring £17,000, so going forward my goal is to retain 40% of the takings for the tax bill, to declare the takings as personal income and pay the tax accordingly from the retained takings, and send only the remainder to the XXX, however I would need a professional accountants letter clarifying my current position and advising me to do this before I approach the XXX to tell them this is my plan. I suspect from their small print they are fully aware of having engineered me into this position, so I need to be able to present my position clearly, calmly and as a foregone conclusion. Is this something you are certified to do for me? If so, please let me know your fee for agreeing the text and posting the letter.

Many thanks,

Carol

Expert:  bigduckontax replied 2 years ago.
My immediate reaction Carol is 'Why?' You cannot be expected to bear in taxation terms activities undertaken on behalf of another orgainsation. I should confine yourself to telling them that you will forward the surplus after deducting the relevant tax to which you are liable. If they persist in their demands for letters of support from professionals then by all means comply, but make it clear that the fees involved must be met by them and not by you personally. I effect, tell them politely to take a running jump. In reality you are being put upon by a rather nebulous body and that should not be tolerated under any circumstances.
Customer: replied 2 years ago.

A nebulous body that should not be tolerated under any circumstances - you've met my father!

Seriously, I am trying to be level headed about this. Once I realised the outrage, then ran though the implications for all the other garden owners, the finances and structure of said nebulous body and my own position in relation to it, I am trying to work out a secure position with no presumption of trust on the part of the other party. From past experience (see above!) I know there's nothing like documented facts in my back pocket when engaging with nebulous bodies. I am happy to pay a moderate amount to arm myself with said letter, just to fortify myself against the fog before I engage- just getting my ducks in a row.

Gut reaction is to stop dealing with the XXX, but I don't want to throw the baby out with the bathwater and stop doing the open garden days, as it has generated garden design work and press coverage for the gardens, and I hope to build a regular visitor base through the XXX open days so I can dispense with the nebulous body at a time of my choosing.

I hope this answers your question "why?" - would you be willing to write my fortifying letter?

Expert:  bigduckontax replied 2 years ago.
Well, I could assist you, but not immediately. I am answering this query from a location 7 hours ahead of GMT where went on the advice of my GP for a rest. I will be back in the UK on the 21st. Perhaps you might like to contact me on castell560 at btinternet.com.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Hi Keith,

Sorry - I hope my conundrum didn't raise your blood pressure! You have been extremely helpful and I am very grateful for your advice, but I will let you off the hook and do it through a local tax accountancy firm, now I know I'm not imagining things!

Enjoy your holiday,

Best wishes

Carol

Expert:  bigduckontax replied 2 years ago.
Thank you for your kind wishes Carol and your support. It is lovely and warm here, unlike Scotland, my UK base!
I am on 17 different pills a day at present! The really efficient one is an anti flux capsule; haven't had a days indigestion for over 7 years! I am on 4 different blood pressure medications, the latest being highly effective.

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