Administering Gift Aid
Who qualifies to be a Gift Aid donor?
Section titled “Who qualifies to be a Gift Aid donor?”Gift Aid donors must:
- Be individual UK taxpayers. Donations from companies, for example, do not qualify.
- Pay enough tax. Donors must pay enough tax to cover all their donations to charities and Community Amateur Sports Clubs in a tax year, 06 April to 05 April.
- Have made a Gift Aid declaration. Read more about declarations here.
Declarations
Section titled “Declarations”HMRC explains about declarations and shows model examples on its website: https://www.gov.uk/claim-gift-aid/gift-aid-declarations. We have also agreed a lighter version suitable for envelopes. This appears on all our Gift Aid envelopes.
HMRC allows charities to compose their own declarations. Below are the main points to bear in mind if you are contemplating this:
Declarations must:
- Show the beneficiary. A declaration that does not show the name of the church or charity which will benefit is not valid for a Gift Aid repayment claim.
- Identify the donor. The whole system revolves around individual tax paying donors agreeing to Gift Aid their donations. It is therefore essential that this person can be identified, normally by giving full name and a minimum of house number and post code.
- Give consent to reclaim. Gift Aid is a form of tax relief for the individual. It is therefore essential to have permission from that individual for the relief to be passed to the charity making a claim on that person’s donation.
- Explain ‘enough tax’ requirement. This changed in early 2012. A declaration must now explain that the donor must have paid enough tax on all donations to charities and Community Amateur Sports Clubs throughout the tax year, not just enough tax for one specific donation.
- Signatures. Signatures are not required to make a Gift Aid declaration valid. However, they add useful formality and are considered good practice.
Aggregating donations
Section titled “Aggregating donations”For some years, HMRC has allowed aggregating of small donations up to £10 for ease of form filling. Charities can aggregate donations with a combined value up to £1,000 per line on a Charities Online submission. However, aggregated donations still need to be backed up with valid declarations from UK taxpayers. This initiative is not to be confused with the new Gift Aid Small Donations Scheme introduced in April 2013.
Gift Aid Small Donations Scheme (GASDS)
Section titled “Gift Aid Small Donations Scheme (GASDS)”From 06 April 2013, most charities, unless very small, have been able to reclaim Gift Aid on donations up to £20. From the 2016/17 tax year the combined value of these donations can be up to £8,000 per year (previously up to £5,000). This is the equivalent of a free £2,000 each year. Full details about the scheme are available at: https://www.gov.uk/claim-gift-aid/small-donations-scheme.
Community buildings
Section titled “Community buildings”Churches can enhance this by making use of ‘Community Buildings’ allowances, if there is more than one church in the PCC. As long as 10 people use the building, the allowance can be claimed for each building. More information: https://www.gov.uk/guidance/claiming-a-top-up-payment-on-small-charitable-donations#collections-in-community-buildings. A very helpful pdf download on making the most of GASDS is available via the Church of England’s website, www.parishresources.org.uk.
This initiative is not to be confused with aggregation, discussed here.