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Gift Aid

Update, 06 November 2015:

Gift Aid

Churches and charities given exemption on use of old envelopes

FOR INFORMATION

We recently reported that HMRC had announced details of new wording for the Model Gift Aid Declaration, which was due to be in force from April 2016. A number of churches have thousands more Gift Aid envelopes in stock than could be used before the deadline and raised concerns about the associated waste and additional costs that would be incurred. These concerns were shared with HMRC and led to a petition, which attracted over 700 signatures.

In response to this appeal, HMRC has agreed that churches can use up their current stock (ordered up to 21 October) of pre-printed Gift Aid collection envelopes beyond April 2016. Only church Gift Aid envelopes are covered by this concession and other Declarations will need to be updated.

This is a very welcome and sensible step. HMRC’s guidance will continue to recommend that charities introduce the new wording by April 2016, but, having spoken to HMRC officials today, CLAS is assured that this agreement will be honoured.

[Source: HMRC, 6 November]


Update, 17 December 2012:

This is to alert you to two significant changes to Gift Aid that are anticipated in 2013, and to remind you of an important change from the end of 2012.

Change to Declarations

A reminder that from the end of this month, all newly signed Gift Aid declarations must use amended wording. See the Gift Aid 2012 Action page for detailed guidance. Existing supplies of envelopes can be used up, and existing declarations remain valid.  

Online Claims for Gift Aid HRMC have announced that online claiming will replace the electronic R68i claims form (see the online claiming information sheet). The system is planned to launch from April 2013, although this date is not yet confirmed, and given there are major changes required to HMRC’s operating process, this date could slip. As and when we know more, full guidance will be available through the Parish Resources website. As well as an electronic system, parishes will be able to claim on paper (although this will be hand-written each time on a scannable form) or by using approved software such as Data Developments’ Donations Co-ordinator (which can be purchased at a discount through Parish Buying).

Gift Aid Small Donations Scheme

The Bill has passed through the Commons and is now in the Lords. A number of improvements to the scheme should mean that parishes should benefit by up to £20 million. HRMC are due to produce guidance in the New Year, and the Church nationally will work with them to agree a simplified version for parishes. It is not expected that this will be available much before the launch of the new scheme in April, although this should not be a problem as it is not anticipated that any new record keeping requirements, and claims will happen until later in the year.


Update, 16 March 2012:

HMRC have just introduced new guidance that requires charities to use new wording for all Gift Aid declarations signed after the end of this year; although parishes should be encouraged to adopt the new wording as soon as possible. All forms of declarations need changing - those for regular giving, on Gift Aid envelopes, on websites, etc. However, existing enduring declarations need not be changed.

The new wording clarifies the (unchanged) requirement that donors must pay sufficient income or capital gains tax to at least equal the amount that charities reclaim on their total donations for the year. Parishes must adopt this guidance as the HMRC guidance clearly states that "If your charity does not provide this explanation the declaration will be invalid and Gift Aid will not be due on the donation".

A pdf guide with model declarations is on the Parish Resources website at:
www.parishresources.org.uk/wp-content/uploads/GIFTAID_2012-_ACTION.pdf


Why is Gift Aid important?

The income from payments via Gift Aid can be the single most significant element in your parish finances. For every £1 that is given by Gift Aid, the Inland Revenue will give 25p to your parish.

 

Help available for Planned Giving Secretaries

The Diocesan Office has invested in software that will allow us to administer gift aid payments on behalf of parishes, free of charge. Central administration means less work for your planned giving secretary and ensures that the administration of pledges is in line with current legislation.

 

How monthly Gift Aid claims work

The covenantor signs a Gift Aid declaration to the diocese in favour of your parish and a bankers order in favour of the central Gift Aid bank account. Your planned giving secretary forwards the Gift Aid declaration and bankers order to the Diocesan Office. The diocese makes a monthly claim to the Inland Revenue for the tax due. Every month the diocese will return the gift aided amount and the tax refund automatically to your parish's bank account.


Frequently asked questions:

Do I have to give a regular amount each month?

We hope that you will continue to pledge an amount each week or each month But the benefit of the system is that once you have agreed that the church may collect tax paid, your permission may be applied to any gifts which you make to your church.

 

I took out a covenant recently. Do I need to sign anything else?

No, your covenant is perfectly valid for the period stated but because it will only cover donations up to the amount of the covenant, the Gift Aid Recorder may ask you to complete a new declaration.

 

I am due to retire next year and I do not know whether I will still be paying tax?

You may allow the church to reclaim the tax on any gifts which you make until that time. If your tax situation changes, you should advise the Gift Aid Recorder immediately.

 

What if I'd like to make a 'one off' gift?

If you have already signed a general gift aid declaration you need to no more; any recorded gifts which you make to your church will be tax efficient.

If you have not signed a declaration, please contact your Gift Aid Recorder; you may either sign a declaration which relates to this specific gift or a more general one which will allow your church to reclaim the tax on all gifts that you make in the future, as long as the Gift Aid Recorder knows about it and there is an audit trail.

 

What if I pay tax at more than the basic rate?

When you complete your annual tax return, the Inland Revenue will refund the difference between the basic rate of tax and the higher rate on all charitable donations. For this reason, you may wish to increase the amount of your gift.

 

What does this mean to me if I pay no tax?

You may not give under the Gift Aid scheme if you pay no tax. Remember, however, that if you receive interest on a bank of building society account net of tax or have paid capital gains tax, you have paid tax an d are entitled to use the gift aid scheme.