Gift Aid

The information below has been designed to help the reader understand how to make tax efficient donations and gifts to the church and other charities by providing answers to commonly asked questions. This information is correct at the time of publication and is intended as guidance only. You should consult HMRC or a professional advisor if you are in doubt.

 

 

What is Gift Aid?

Gift Aid is a scheme that parliament approved to enable tax relief on money donated to UK charities to be reclaimed by the charity on behalf of the donor.

The Free Will Offering envelope is helpful in supporting regular giving and is available to any member of the congregation. The envelopes are available in boxed sets consisting of (usually) 52 envelopes printed with the date of each Sunday throughout the year. On each envelope is printed a number which is unique to the donor (eg 123). This system provides a convenient method of the donor establishing planned and regular giving. A donor using the Free Will Offering envelope system may also make tax efficient donations by completing a Gift Aid Declaration form.

Is the church a charity?

Yes, Nursling with Rownhams Parochial Parish Council is a registered charity (1130927) and members of the PCC are charity trustees and are required by the Charity Commission to run the church on a not for profit basis.

What happens to my gifts of money?

The funds that are administered by the charity (ie the church) are for the work of God in the local community and elsewhere, with donations to other charities as appropriate. Each charity must set out charitable objectives to meet legal obligations administered through the Charity Commission.

Is this not just a tax dodge?

No it is not a tax dodge, but it is a way of making tax efficient gifts. It is a method the government has devised to encourage tax payers to financially support charities.

So how does it benefit the charity?

Provided you pay enough UK tax (income tax and/or capital gains tax) to cover the amount of tax the charity will reclaim, then for every £100 you donate then the charity will reclaim from HM Revenue & Customs another £25 making an effective gift of £125.

What is the charity claiming back on my behalf?

The church can claim back tax only at the basic rate (20%) under the Gift Aid scheme.

Can I claim back any tax on my donations?

No. If you are a basic rate tax payer you cannot claim further relief on the donations.

But supposing I am a higher rate tax payer?

There is no further benefit to the church under the Gift Aid Scheme as the charity can only reclaim at the basic rate. However, a higher rate tax payer (currently at 40% or 50%) can make an individual claim to HM Revenue & Customs and obtain a rebate on charitable gifts. For instance, if a higher rate tax payer made a donation of £100 to the church, the church will reclaim an additional £25 (making a total gift of £125 to the church) and the individual could reclaim £25 of tax at the 40% rate (making the cost of the donation effectively £75), or the individual could reclaim £37.50 at the 50% rate (making the cost of the donation effectively £62.50). Please see also the section on What is Self Assessment giving?

Can I find out how much I have given?

Yes. The church is required by the Gift Aid Scheme to maintain records of donations made and a statement can be provided to each donor. These records are also open to inspection by HM Revenue & Customs.

How can I donate money to the church using this scheme?

Firstly the charity must be registered to operate a Gift Aid scheme and each donor must pay enough UK income and/or capital gains tax to cover the amount of tax the charity will reclaim and a Gift Aid Declaration made to this effect. There are various methods of making donations.

Can I donate without making a declaration?

The church is able to accept all donations and will retain records of all financial gifts. However, the church is unable to reclaim tax under the Gift Aid Scheme for those gifts made by donors who have not completed a Gift Aid Declaration. The church is also unable to reclaim tax on donations whereby the donor cannot be identified eg cash gifts without some form of accompanying identification code relating to the donor.

What if my income fluctuates or has changed because of increased personal allowances, and I pay insufficient tax on occasion?

Please inform the Gift Aid Secretary that you wish the Gift Aid Declaration to be suspended until further notice. The church must not reclaim tax for which the donor has not paid . Equally the donor has a responsibility to inform the charity of changed tax status. The Gift Aid Secretary cannot advise on your personal circumstances.

What is Self Assessment Giving?

If you complete a Self Assessment tax return and are entitled to a tax refund, you can choose to have all or part of the repayment sent directly to the charity by HMRC. A 'SA100 Charity' form has to be completed and the form is available from HMRC. The form requires entry of the code for this charity (HAT 17XG). A further advantage is that the repayment also can be made as a Gift Aid donation.

Why is the Gift Aid Declaration so important?

The Gift Aid Scheme is very beneficial to charities such as the church and HM Revenue & Customs has to ensure the scheme is not misused. The Gift Aid Declaration contains the name of the charity (in this case Nursling and Rownhams Parochial Parish Council) and the donor's name and address, together with a declaration that the charity may reclaim tax on the donations made by the donor and that the donor is a UK tax payer. The form does not contain any personal financial information.

How do I complete a Gift Aid Declaration?

A Gift Aid Declaration form can be downloaded from this site or obtained from the Gift Aid Secretary. Upon completion it should be returned to the Gift Aid Secretary.

Alternatively if you make donations using the Orange Gift Aid envelopes a similar declaration has to be completed on the outside of the envelope.

Do I have to be a member of the church to use the Orange Gift Aid envelopes?

No. This method of giving is ideal for visitors to the church who fulfil the donor criteria and can complete the declaration. The Orange Gift Aid Envelopes can be used at anytime by members of the church as a method of either regular or supplementary giving.

Can the Free Will Offering envelopes be used for the Gift Aid Scheme?

Yes. The Free Will Offering envelopes can be used in conjunction with the Gift Aid Scheme provided a separate Gift Aid Declaration has been completed.

Do I have to complete and sign a Gift Aid Declaration on each and every occasion?

No. If you are a regular attendee of the church you may wish to give using the Free Will Offering envelopes or Standing Order facility. If you wish to make your donations tax efficient then a Gift Aid Declaration should be completed and the number on the envelope will be linked through the records to the appropriate Gift Aid Declaration. The church will be unable to reclaim tax for donations made using the Free Will Offering envelopes or Standing Order facility without a current Gift Aid Declaration.

If you use Orange Gift Aid envelopes the Gift Aid Secretary can provide a unique donor identification code that can be written on the outside of the orange envelope for convenience. Please do not use the number on personal Free Will Offering envelopes as this does not correspond to the unique donor identification.

What is this unique identification code?

The charity maintains records for each donation made and to undertake this efficiently every donor is uniquely identified by a code starting 'NR', 'GNR' or 'RNR' followed by several numerals.
This code is used in the Gift Aid Scheme to reclaim tax on behalf of the donor. This code is ONLY applicable to gifts made to Nursling and Rownhams Parochial Parish Council.

How does the standing order work for retiring collections?

Some members find it convenient to set up a standing order for their regular giving towards the work of the church. It is possible also to set up a Standing Order to make donations to the charities that PCC has agreed to support, normally through retiring collections. With this standing order an amount is attributed each month to the relevant charity as described in the booklet . Our Mission and Charity Giving Explained.

How does the charity reclaim the tax on my behalf?

Every quarter the Gift Aid Secretary completes a submission to HM Revenue & Customs reclaiming tax on those donations for which a valid Gift Aid Declaration is held by the charity. The submission to HM Revenue & Customs contains the name of each donor, the unique identification code and the amount donated for the period of the claim.

What information is kept about me and my donations?

The church uses commercial software designed to administer the record keeping of charitable giving. Every donation that is identifiable to a specific donor is recorded, stored electronically and is used by the Gift Aid Secretary for the purposes of making reports and claims to HM Revenue & Customs. The information is backed up at least weekly electronically to three media and a backup copy is also maintained by the Treasurer.

Who has access to my records?

The Gift Aid Secretary, the Honorary Treasurer and HM Revenue & Customs (rarely!) have access to all the electronic and paper records associated with the Gift Aid Scheme.

Is the Gift Aid Scheme really beneficial?

Yes. The claim for the last quarter  was for about £3200. This is then used for the charitable purposes of God's work in the community and elsewhere.

Are there limits that apply to the Gift Aid Scheme?

No. The church will reclaim tax on all valid donations through Gift Aid Scheme whatever the amount donated. Your level of giving is a personal and prayerful decision.

What happens to the gifts I am making to other charities through the retiring collection?

The church makes a tax reclaim on all the gifts received and apportions funds and makes charitable donations accordingly.

Any Other Questions please Contact:

John Holden - 023 80733627
Or Via our Contact page
Or look at the
HMRC web site