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HMRC internal manual

Tax Credits Manual

Eligibility - income (calculation): Income calculation - general deductions (Info)

When calculating income for tax credits purposes deduct

  • the amount of any banking charge or commission payable for the cost of exchanging foreign currency (income that is made in a currency other than sterling)
  • the gross amount of any qualifying donation (Gift Aid) made by either customer as approved under Chapter 2 of Part 8 of ITA (Gift Aid)
  • the amount of any contribution made by either customer to a registered pension scheme together with the amount of any tax relief due on those contributions.

Note: Gift Aid can only be claimed by a taxpayer who has paid enough tax in the year the donation was made. When working out their income for tax credit purposes, a non-taxpayer would not be expected to claim Gift Aid deductions. We would only expect to see deductions from a person with a taxable income who has actually made Gift Aid payments.