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Gift Aid basics12 October 2016

Kitt Green St Francis

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Gift Aid 2016

• Role of Gift Aid Secretary

• Basics

• Operating a Scheme

• Update on other Gift Aid issues

• Any questions?

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The role of a Gift Aid Secretary

• Thank you!

• Ensure accurate records are kept

• Encourage tax efficient giving

• Encourage regular review

• Produce the claim

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Encourage tax effective giving

• Encourage giving

• Encourage tax payers to give by tax effective means

• written

• presentations

• verbal

• Encourage regular review & thank yous

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How does tax effective giving work?• Taxpayers who “Gift Aid” their giving get tax relief for the payments.

• They pay a net amount, on which they have paid tax, to the church.

• The church claims back the tax, at the basic rate, from HMRC Charities.

£80 £20

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Requirement for donor #1• Must be an individual, who

• is charged UK Income Tax and/or Capital Gains Tax for the year of donation at least equal to the tax treated as deducted from alltheir Gift Aid donations

• can be Resident or Non-Resident

• Tax paid at any rate

• Tax paid on dividends until 05/04/2016

• Donor’s responsibility to ensure tax to cover

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Requirement for donor #2

• Donation must be a gift of money

• With no conditions attached to the payment

• Only for individualsCompany donations are made gross and set against donating company’s profits

Requirement for charity #1

The charity must hold a valid Gift Aid Declaration for everyDonor included in the repayment claim

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Declaration must contain:• Donor’s name

• Donor’s full home address

• POSTCODE

• Church’s name

• Statement identifying which donations are covered

• Confirmation that donations are to be treated as Gift Aid donations

• Note explaining tax requirement

• Also

– Donor’s signature

– Date of declaration

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Identifying relevant donationsUse one of:

1. The donation of £… I made to you on dd/mm/yy

2. The enclosed donation

3. All donations I make under the Standing Order mandate below

4. All donations I make on or after the date of this declaration

5. All donations I have made since dd/mm/yy and all donations I make from the date of this declaration until I notify you otherwise

6. All donations I have made for the four years prior to this year and all donations I make from the date of this Declaration until I notify you otherwise

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Confirmation that donations are to be treated as Gift Aid donations:

• Please treat the enclosed Gift as Gift Aid donations

• I want my donations to be Gift Aid donations

• Tick here if you want to Gift Aid your donations

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Note explaining tax requirement – NEW versionI am a UK taxpayer and understand that if I pay

less Income Tax and/or Capital Gains Tax than

the amount of Gift Aid claimed on all my

donations in that tax year it is my responsibility

to pay any difference.

• New wording from 6 April 2016.

• No need to get replacements for current enduring declarations

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Previous tax warning

1 January 2013 to 5 April 2016I confirm I have paid or will pay an amount of Income Tax

and/or Capital Gains Tax for each tax year (6 April to 5

April) that is at least equal to the amount of tax that all

the charities or Community Amateur Sports Clubs (CASCs)

that I donate to will reclaim on my gifts for that tax year.

I understand that other taxes such as VAT and Council

Tax do not qualify. I understand the charity will reclaim

25p of tax on every £1 that I have given.

This wording MUST have been used from 1 January 2013

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Declarations can be made:• In advance of the donation

• At the same time as the donation

• Up to four years after the donation

• For payments made on or after 1 January 2012

• In the following ways:

• In written form or by ticked box

• Recording or donor confirmation of pre-recorded declaration

• Computer Declaration template linked to donors banking details

• Emailed copy of Declaration

• Computer screen print of Declaration

• Scanned image of Declaration

• Mobile phone text message confirmation of declaration

• Confirmation donor has been sent written confirmation of auditable Declaration

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HMRC model

declaration

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Declarations available:

• Cream Declaration to cover all giving - enduring

• Cream Declaration with Standing Order form

• Blue Declarations for single enclosed donation

• Envelopes with Declaration for single donation,

including baptisms, funerals and weddings

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One-off donation Gift Aid envelopes

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Sample explanationGift Aid adds a bonus to any money you give to this Church.

If you are a UK taxpayer and put your gift in the special envelope

provided we can receive an extra £2.50 for each £10 you give. You will

need to fill in your name and home address on the envelope and sign it

- but that is all.

Gift Aid is a scheme that allows any charity to claim a refund of tax the

donor has paid on the money donated. You must be a UK taxpayer and

understand that if you pay less Income Tax and/or Capital Gains Tax

than the amount of Gift Aid claimed on all your donations in that tax

year it is your responsibility to pay any difference.

The completed information on the donation envelope is required by

HMRC as your declaration that you wish the church to recover the tax.

The Church will regard your donation and declaration as confidential.

Thank you

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New sponsorship Declaration

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Written statement to validate Declaration:

• Information provided by donor in declaration:

• Name and address of donor

• Name of the church

• Confirmation that donation to be treated as a Gift Aid donation

• The donations the declaration covers

• Note explaining tax requirement

• Date on which written statement sent out

• Note explaining 30 day cooling off period

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Example written statementFull name & address & Postcode Date

Dear ………………….

Thank you for giving to the church and for agreeing, on …./…./…. , that the church can reclaim tax on all your donations.

You must be a UK taxpayer and understand that if you pay less Income Tax and/or Capital Gains Tax than the amount of Gift Aid claimed on all your donations in that tax year it is your responsibility to pay any difference.

The church will reclaim 25p of tax on every £1 that you have given.

You may cancel this arrangement in writing within 30 days and, if you do so, it will be as if this agreement had never been made. The church will keep a copy of this letter.

Yours sincerely

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What happens when things change?• Donor can cancel at any time

• Cannot be made retrospectively, unless

• Concerns a written statement

AND

• Within 30 day cooling off period

• Takes effect on date of notification, or later date as specified by donor

• Declarations for one-off gifts can’t be cancelled

• Any amendments to names or addresses should be kept with the Declaration

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Requirement for charity #2

• Audit trail for each donor

• showing receipt of the donation

• through the church’s books and records

• to the bank statements

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Records needed for Gift Aid

• Declarations – including tax warning

• Donation records• Cash book

• Paying-in book

• Bank records

• Envelope register

• Sample of envelopes – month each year

• Correspondence and literature• Cancellations

• Record of any benefits

• Keep for 6 years

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Donor Register• The donor’s name

• The donor’s full address, including postcode

• The date of the Declaration

• The date the Declaration was valid from

• The method of donation

• Envelope, plus the number

• Standing Order

• Cheque

• Occasional donation envelope

• … or a combination of these.

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Vestry procedure: best practice

• Count immediately after service

• 2 people. Both to sign.

• Count loose offerings separately. Analyse cash.

• Separate Gift Aid & non-Gift Aid envelopes (if known)

• Mark envelopes with contents

• If cheque, mark envelope with “cheque”

• Balance total envelope cash with total on envelopes

• Total all offerings

• Record in Parish registers

• Reminder: Keep 1 month’s sample, marked contents

37Collections on: ……………………………….. Attendance 10 or more? Y / N

Include: loose plate offerings and donations 1 16 1

2 17 2

Notes £50 3 18 3

£20 4 19 4

£10 5 20 5

£5 6 21 6

Coins £2 7 22

£1 8 23

50p 9 24

20p 10 25

10p 11

5p 12

2p 13 Tot Tot

1p 14

Total cash 15

Cheques Tot

TOTAL

Gift Aid envelopes (1-15)

Other envelopes (16-25)

Mission envelopes

Loose money / donations - GASDS eligible

Loose money / donations - not GASDS eligible

Other ……………………………. Total cash

Other ……………………………. Cheques

TOTAL COLLECTIONS TOTAL

Signed …………………………………………… and ……………………………………………

1p

All Monies

Notes £20

£10The Gift Aid Small Donations Scheme (GASDS) only applies

to cash donations of £20 or less. £50 notes and cheques

should be recorded in the right hand column. Any donations

that are know n to be over £20 f rom an individual donor

(e.g. tw o £20 notes in an envelope, or secured w ith an

elastic band) should be recorded in the greyed cells.

£5

Coins £2

£1

50p

20p

10p

5p

2p

Eligible Not eligible

St Church on the Hill, Hillytown

Potential Small Donations Scheme Gift Aid Envs Other Envelopes Mission Envs

Sample vestry sheet,small church

38WEEKLY INCOME RECORD

St Someone, Somewhere

Date: 27 September 2015

1st 2nd 3rd

Service Service Service Total

Collections 10.00 65.00 20.00 95.00

Gift Aid Envelopes - 1 to 100 30.00 180.00 70.00 280.00

Other Envelopes - 201 to 300 5.00 35.00 25.00 65.00

Building Fund Gift Aid Envelopes - 501 to 600 20.00 5.00 25.00

Donation - Unrestricted 10.00

Funeral/Wedding Collections 5.00

Donation - Restricted……….. Building Fund…………..… 15.00

Leprosy Mission…………. 5.00

Funeral/Wedding Fees 60.00

Other Income:

…………………………………………………….Magazines 30.00

…………………………………………………….Hall Rent 150.00

…………………………………………………….

…………………………………………………….

Total Income 740.00

Expenses

Organist 40.00

……Miss Jones - Sunday School Expenses……………………….. 4.00

…………………………………………………….. -

44.00

Total banked 696.00

Signed………………………………. ……………………………………

Sample income sheet,large church

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Envelope Register #1

1 January to 5 April 2015

Envelope Week 1 Week 2 Week 3 Week 4 ……… Week 14 TotalNo. 04/01/15 11/01/15 18/01/15 25/01/15 …….… 05/04/15

1 2 4 2 ……… 2 104

2 25 20 ……… 45 300

3 6 4 3 ……… 5 312

Weekly Totals: 27 6 8 25 ……… 52 716

Name on Declaration = name on envelope list = taxpayer

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Envelope Register #2

6 April to 31 December 2015

EnvelopeTotal

No. 12/04/15 19/04/15 26/04/15 03/05/15 ……… 27/12/15

1 2 4 2 ……… 2 104

2 25 20 ……… 45 300

3 6 4 3 ……… 5 312

Weekly Totals: 27 6 8 25 ……… 52 716

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Standing Order records

� For Standing Order payers, check bank statements

• Check names match Declaration

• Record dates received

• Record amounts received

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Standing Order Payment Control

2015

Donor Standing Jan Feb Mar Apr Tot Apr May Jun Jul Dec Total

order £

P Black £10 pm 10 10 10 10 40 10 10 80

7 Jan 4 Feb 6 Mar 3 Apr 6 Oct 6 Jun

212 213 214 215 218 219

C Brown £25 pq 25 25 25 50

25 Jan 25 Apr

212 215

C White £50 per 50 50 100

half yr 7 Mar

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Total 35 10 60 10 125 25 10 10 230

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Donations Register

Year 2015 – Apr to Dec

Donor Date GAD Method of TotalValid from Payment 12/04/15 19/04/15 26/04/15 ….. 27/12/15

A Davies 06/04/2000 Env (15) 10 6 …… 10 26

S Jones 06/04/2005 Chq 25 …… 45 300

K Smith 26/04/2015 Env GAD 50 …… 50

Weekly Totals 10 25 56 …… 55 376

Other funds / one-off envelopes / extra donations etc

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Claiming under Gift Aid

• Claim on accounting year (31 December)

• Details needed for each donor:

• Name

• Date of donation, or last date if more than one donation

• Total amount of donation(s)

• Address details – possibly use Electoral Roll (but last revision 2013)

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Donor Claim Summary

Donna Smith Jan – Apr 2015

Method Amount Last donation date

Env 34 256.00 29/03/2015

SO 120.00 03/04/2015

Occ envs 50.00 27/02/2015

Total 426.00 03/04/2015

Claim summaryGift Aid claim for period to

Name No Amount Last date Amount Last date Amount Last date Amount Last date Total Last date

Bloggs, Joe 3 520.00 27/12/2015 120.00 31/12/2015 120.00 25/12/2015 100.00 03/05/2015 860.00 31/12/2015

Hardy, Thomasina 12 36.00 06/10/2015 36.00 06/10/2015

Jones, Elizabeth 1200.00 22/12/2015 1200.00 22/12/2015

Windy, Geoffrey 6 400.00 25/12/2015 12.00 02/08/2015 412.00 25/12/2015

956.00 1320.00 120.00 112.00 2508.00

06/04/2015 31/12/2015

Final claimEnvelopes Standing Orders Mission donations Other

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Diocesan scheme:

donations received report.

Claiming process

• Charities online

• Only method since October 2013

• Non diocesan scheme parishes only

• Three options:

1. Claim using online form

2. Claim using own software database

3. Claim using a paper form

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Option 3 – paper form

• For those who don’t have internet access

• Order from HMRC

• Fill in by hand: one box per character

• For 15 donors (up to 90 with continuation sheets ChR1CS)

• Cannot use photocopies

• Automatically scanned by HMRC

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Option 2 – software database

• Intended for more than 1000 donors, can be used for any number

• Claim directly from own internal database or system

• Software provider needs to work with HMRC to ensure compliance

• Check your software can do this

• You need to sign up to Charities Online

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Option 1 – online form

• Up to 1000 donors per claim

• Sign up to Charities Online

• Log on to Government Gateway - once

• Enrol to use HMRC Charities Online

• Register and activate service

• Download Gift Aid schedule spreadsheet from HMRC

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Field Required?

Maximum

number of

characters

Notes

Title No 4

First name or

initialYes 35 No spaces

Last name Yes 35

House name or

numberYes 40

PostcodeUK addresses

only -

UPPER CASE

Include a space

Aggregated

donations

Only if claiming

aggregate

donation

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Simple description.

DON'T enter Yes or Not

Applicable.

Sponsored event NoYes or

leave blank

Donation date

(or latest in

series)

Yes DD/MM/YYDON'T use hyphens or full

stops

Amount Yes - DON'T use a £ sign

Information required52

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Schedule creator (national)

www.parishresources.org.uk/wp-content/uploads/Gift-Aid-spreadsheet.xls

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Aggregate claims

• Each Gift Aid donation not more than £20

• From different Declarations

• Aggregated line not to exceed £1000

• Sensible label on schedule – eg May gifts

• Keep supporting documents for audit trail

• Not for:• Donations larger than £20• Collections with no Declarations (!)• Sponsored events• Admissions to charity visitor attractions

How to claim online• Type, or Copy and paste, information into schedule spreadsheet – and SAVE

• Log on to Charities Online

• Fill in details about claim

• Upload spreadsheet when prompted

• On screen message for any errors

• Amend spreadsheet and re-upload

• On screen acknowledgement of claim received

• Repayment paid by BACS

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Reminders• Audit trail for each donation

• Itemisation of every cheque

• Avoid joint envelopes

• Joint accounts – if in doubt, seek clarification

• Reconcile at end of period

• Back up computer records

• Declaration before claim

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4 year claim back period

• Effective from 1 April 2010

• A charity which is a Company for tax purposes must make any claim within 4 years from the end of the accounting period to which the claim relates.

• Churches’ accounting period ends on 31st December.

• Donations received from 1 January 2012,claim must be with HMRC by 31 December 2016

• Donations received from 1 January 2013,claim must be with HMRC by 31 December 2017

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Record retention• Keep Gift Aid records for 6 years after the end of the accounting period they relate to

• For example

Claim for 2011 made in 2012,Keep the records until at least 31 December 2017

• Keep enduring Declarations permanently

• If HMRC asks questions about claim, keep until enquiries are finished

• Took effect from 6 April 2013

• Small cash donations up to £20

• Claim on donations up to £5000 per tax year= repayment £1250

• From 6 April 2016, £8000 per tax year= repayment £2000

Gift Aid Small Donations Scheme (GASDS)

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GASDS 2 - eligbility

• Charity must exist for at least 2 years, and

• Made successful Gift Aid claims in at least 2 of previous 4 years, without 2 year gap

• Make successful Gift Aid claim on donations received in same tax year as GASDS claim

• The matching principle:Total Gift Aid donations must be at least 10% of small donationsie need £500 Gift Aid donations to claim on £5000 small donations

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GASDS 3 – the matching principle

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Amount GASDS received can be 10 times amount of Gift Aid payments received – in tax year

For example, from April 2016:

Income: Gift Aid £600 GASDS £8000

Claim: Gift Aid £150 GASDS £1500

(10 x £600 = £6000, £6000/4 = £1500)

Need £800py for full GASDS = £15.38pw

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GASDS 4

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Rules concerning:

• Community buildings – different charity structure

• Connected charities – preventing fragmentation

Agreement HMRC and C of E

• Single parish, single church?claim on main “Top up” element of the scheme

• Multi-church parish?claim on community buildings element of the scheme

DO NOT exceed £5000/£8000 per churchor C of E may lose recent concession

GASDS 5 – what can you claim on?

• Single parish, single church:

• Eligible offerings: cash and non Gift Aid envelopes

• Donations in boxes, wall safes

• Cash donations outside the building eg home communions

• Multi church parish – only claim on:

• Donations given in the building

• Whilst service taking place

• At least 10 people present

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GASDS 6

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What should we do?

• Not the end of Gift Aid – 2 schemes

• Keep Gift Aid records with audit trail

• Make regular (ideally annual) Gift Aid claims

• Ensure correct vestry procedure

• Decide which element use:“Top up” or “community buildings”

• Max claim £5000 rising to £8000 per church

www.liverpool.anglican.org/gasds

68St Somewhere's Church Date: ………………………………

Vestry Record Location: ……………………………………….

Attendance 10 or more? Y / N

Potential Gift Aid Small Donations SchemeInclude: loose plate offerings and donations

TOTAL

Notes £50

£20

£10

£5

Coins £2

£1

50p

20p

10p

5p

2p

1p

Total cash

Cheques

TOTAL

Signed ................................ and ................................

Eligible Not eligible

HMRC Change of Details form: ChV1• Use to notify HMRC of:

• New or additional Authorised signatory ie Gift Aid sec.

• Change to bank account or new to BACs

• Changes to “responsible” persons

• Other changes

• First use: notify 2-4 “responsible” persons

• Sign that new GAS had read F&P guidance

• Notify HMRC month before claim

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Fit & Proper Persons Test• Legislation introduced 2010

• Ensure church funds only used for charitable purposes

• Good news: HMRC assumes charities do not knowingly appoint people not F&P

• Bad news: PCCs must demonstrate have ensured managers F&P

• Consequences – could remove Gift Aid entitlement

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Fit & Proper - Terms

Fit & Proper person:

• has not been involved in tax fraud, identify theft or any other kind of fraud

• is not disqualified from acting as a charity trustee or company director

Applies to all managers

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Who is a manager?

• PCC/DCC members

• Gift Aid Secretary

• Those who manage significant amounts of money

For example:

• Chair fabric committee, hall secretary

• NOT flower fund, coffee after church

• Responsible people on ChV1 will be managers

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What do you need to do?

Each manager to sign an appropriate form

• An appropriate form is either

• PCC nomination formwith wording agreed by HMRC

OR

• Fit and proper persons Declaration

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Immediate action

• Ensure following have appropriate form:

• Standing committee – including treasurer

• Gift Aid secretary

• Any paid or volunteer staff responsible for significant amount of spending

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Current action

• New elected PCC members use nomination form with correct wording

• Any other PCC members sign fit and proper persons Declaration

• New managers sign F&P Declaration

• Keep records whilst in post and 4 years

• All managers read F&P helpsheet –requirement for authorised officials

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Just text giving

www.liverpool.anglican.org/Digital-Giving

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Contact Gordon Fath

gordon.fath@liverpool.anglican.org

0151 705 2180

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More information

• HMRC in gov.uk:

– Claiming Gift Aid as a charity or CASC

– Charities: detailed guidance notesparticularly Chapters 3 and 6

• www.gov.uk• 0300 123 1073

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www.gov.uk/claim-gift-aid

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www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-3-gift-aid

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www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-8-the-gift-

aid-small-donations-scheme

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More information

Diocesan Gift Aid enquiries:

0151 705 2132kim.stanley@liverpool.anglican.org

Diocesan Resources Department:

0151 705 2180resources.team@liverpool.anglican.org

Diocesan website: liverpool.anglican.org/giftaid

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Common claiming errors #1

In Gift Aid claims:

• No Gift Aid Declaration

• Incomplete/incorrect Gift Aid Declaration

• No evidence of receipt of donation

• Donor not an individual

• Payment not a gift

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Common claiming errors #2

In GASDS claims:

• GASDS limit exceeded

• GASDS claimed by accounting period, not tax year

• Entering GASDS on Gift Aid schedules

• Not eligible for GASDS

• Duplication of previously claimed Gift Aid when submiting GASDS only claim

Checklist from

Parish Resources,

national church.

www.parishresources.org.uk/wp-content/uploads/GAChecklist2016.pdf