“The Church of England parishes collectively receive over £84 million in Gift Aid tax rebates each year, over £30 million more than the amount collected in the year 2000, and sufficient to pay 3,500 clergy stipends! This is a great tribute to the hard work of volunteers running Gift Aid programmes in parishes throughout the country, as well as a testimony to the value of the Gift Aid scheme.” (Parish Resources, Church of England website)
Churches are charities, and can recover the basic-rate tax paid on donations made by donors who are UK taxpayers. Basic rate tax is 20 per cent, so this means that if you give £1 using Gift Aid, it’s worth £1.25 to the church. The system is easy to set up and operate. In addition the new Gift Aid Small Donations Scheme(GASDS) allows for a Gift Aid style repayment on small cash donations received in churches.
There are a number of advice sheets regarding Gift Aid available at Parish Resources including
- A simple checklist to help you ensure you’re adopting good practice with Gift Aid.
- Guidance on Claiming Gift Aid including a helpful guide to Claiming online which includes screenshots and will walk you through the process.
- Under “Starting Out” Fact sheets aimed to help new Gift Aid officers, and churches setting up Gift Aid for the first time or those new to Gift Aid processes.
- A specific note advising of the need to update the Gift Aid Declaration by 2013.
- A note highlighting ’Ten tips for maximising Gift Aid’
Wording of Gift Aid declaration: In October 2015 HMRC announced a new wording for declarations. This must be used on new declarations signed after 6th April 2016 (although exiting stock of printed materials can be used up). Existing enduring declarations do not need to be renewed.
The new wording requires the donor to confirm that s/he is a UK taxpayer and s/he is paying in the relevant tax year more tax than is being recovered on all Gift Aid donations (i.e. to all charities and Community Amateur Sports Clubs) being made by the donor but that they understand that if they do not, they are responsible to pay any difference. Further information is here.
Gift Aid Small Donations Scheme (GASDS)
Gift Aid Small Donations Scheme: from 2015/16 there will be opportunity for churches, as charities, to claim ‘Gift Aid’ on small cash donations up to £8000 in total (i.e. allowing a maximum of £2000 reclaim at current tax rate) without usual declarations, names and addresses being required: for such claims HMRC will require that standard Gift Aid claims are up to date and in good order.
Following a review over the summer of 2015 HMRC have also now agreed that PCCs are no longer connected for the small donations scheme. Most of our PCCs with a single church can now run the scheme more simply. (See the GASDS page on the parish resources website).