If donations to your church are from a UK taxpayer, you could add 25p to every £1 that is given to your parish through Gift Aid. All you have to do is ensure donors fill in a form to confirm that they are a UK taxpayer and that the tax they pay is more than the amount your parish will reclaim.
For regular giving, parishioners can simply be assigned with a number that appears on their weekly envelopes so there is no need for them to fill in the form for each donation. To take advantage of Gift Aid your church must first apply to be registered as a charity with HMRC.
What is Gift Aid?
Gift Aid is a Government scheme that allows your parish to reclaim the tax that has been paid on donations. It works like this. If Mr.Smith is a taxpayer and gives £10 to his parish, he will have paid tax on that amount. Your parish can therefore get £2.50 back with Gift Aid so Mr.Smith’s donation of £10 would become worth £12.50 and it wouldn’t cost him an extra penny! Here are some examples of how much extra money your parish could receive in just one:
| Weekly Amount Given | ∑ Given After One Year | Extra £ From Gift Aid | ∑ Amount With Gift Aid |
|---|---|---|---|
| £1.00 | £52.00 | £13.00 | £65.00 |
| £3.00 | £156.00 | £39.00 | £195.00 |
| £4.00 | £260.00 | £65.00 | £325.00 |
| £10.00 | £520.00 | £130.00 | £650.00 |
∑ = Total
How do I sign up for Gift Aid?
You first need to ensure that your church is registered with HMRC as a charity. Then, you need to make sure that all donors fill in a gift aid declaration form at the start of the year (for regular givers) and each time they give (for one off donations).The form requires givers to:
- Write their name, address, the date and the name of the parish.
- Sign a declaration saying that they are a UK taxpayer and that they pay more tax than the amount that your parish will reclaim.
How much tax must I pay?
Donors can Gift Aid all their donations providing the amount of tax that they’ve paid (from their wage, salary, pension or investments) is more than the amount claimed. For example, if Mrs.Brown gives her parish £250 over a tax year, she will need to have paid at least £50 in tax.
How does Gift Aid work?
Once parishioners have signed up for Gift Aid, your church will need to keep a record of how much each of them have given. The best way to keep track of this is by issuing each of them special numbered envelopes and recording each donation in a ledger. “Loose plate” donations can’t be included because there is no record of the amount given. For one off donations on occasions such as weddings and baptisms – you can issue Ceremony Envelopes with Gift Aid declaration forms on the reverse.
What happens if parishioners change their mind, stop paying tax or move?
Donors can increase the amount that they give or they can stop giving at any time, but they must notify you if they stop paying tax or if they change their address.
Can both husband and wife make a donation with Gift Aid?
Yes. If they both pay tax, they should both sign a Gift Aid form and make sure that the church is aware of who is giving what.For example, they may both want to have their own set of numbered envelopes or tell you how they want the donation split if, for example, they pay by cheque and have a joint bank account.
What if I already have a covenant?
You can still get back the tax that has been paid with your covenant but, if the donor wants to change the amount that they give, they will need to sign a Gift Aid form.
What happens to higher rate taxpayers?
If givers pay the higher rate of tax, they can also get back some of the tax that they have paid for themselves when they complete their tax return. What this means is that if, for example, Mr.Smith gives £100 and Gift Aids it, his parish will not only get an extra £25 but he can get £25.00 back as well – so it only costs you £75.00 to give £125.
Is Gift Aid confidential?
The amount donors give will be completely confidential and they don’t have to tell you how much they earn or give any other personal details.
Can parishioners use Gift Aid when they give to other causes as well?
Yes. For example, they may give to a charity or to their child’s school and they can also Gift Aid these donations. But they will need to sign separate Gift Aid declarations and keep the overall amount that is reclaimed by all the causes they support to no more than the amount of tax that they’ve paid.