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
happens to my gifts of money?
So
how does it benefit the charity?
What
is the charity claiming back on my behalf?
Can
I claim back any tax on my donations?
But
supposing I am a higher rate tax payer?
Can
I find out how much I have given?
How
can I donate money to the church using this scheme?
Can
I donate without making a declaration?
What
if my income fluctuates and I pay insufficient tax on occasion?
What is Self Assessment Giving?
Why
is the Gift Aid Declaration so important?
How
do I complete a Gift Aid Declaration?
Do
I have to be a member of the church to use the Orange Gift Aid envelopes?
Can
the Free Will Offering envelopes be used for the Gift Aid Scheme?
Do
I have to complete and sign a Gift Aid Declaration on each and every occasion?
What
is this unique identification code?
Can
I make gifts by using a standing order facility?
How
does the standing order work for retiring collections?
How
does the charity reclaim the tax on my behalf?
What
information is kept about me and my donations?
Is
the Gift Aid Scheme really beneficial?
Are
there limits that apply to the Gift Aid Scheme?
What
happens to the gifts I am making to other charities through the retiring
collection?
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.
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.
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.
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 and equally the donor has a responsibility to inform the
charity of changed tax status. The Gift Aid Secretary cannot advise on your
personal circumstances.
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.
Can
I make gifts by using a standing order facility?
Yes, but
to enable the charity to reclaim tax on your behalf a Gift Aid Declaration
form must be completed along with a completed Standing
Order Mandate and
returned to the Gift Aid Secretary. Both these forms can be downloaded from this
site or obtained from the Gift Aid Secretary. Separate Standing Orders can be
set up to enable donations to be made towards ‘General Funds’, specific developments (eg
the Extension) and other
charities that the church supports through ‘retiring collections’ or other
special events. The standing Order mandate is coded to identify whether the
donation is for ‘General’ or ‘Retiring Collection Charities’.
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.
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.
If there are other questions or you remain unsure about any aspect of the Gift Aid Scheme then please contact the Gift Aid Secretary as follows:
Peter C Jackson
- 023 80735523 pcjhome@gmail.comMB - April 2011