Important changes to Gift Aid: Is your church ready?
Gift Aid is an important source of income for many charities registered with the Charities Commission. Gift Aid increases one’s giving by 20%, so a donation of £10 means the church/charity an individual donates to can claim an extra £2, increasing the overall gift to £12 at no extra cost to the one giving, providing they are a UK taxpayer.
The new automated online Gift Aid system went live on 22 April this year. This replaces the old paper forms R68(i) that most charities/churches use to claim the tax relief they are entitled to. Charities will need to start making preparations to use this new online system.
Don’t be too alarmed if you haven’t started to accommodate these administrative changes; this new system won’t be totally up and running until 30 September 2013! The HM Revenue & Customs will continue to accept the R68(i) forms up until this point. The Institute of Fundraising estimates that over 100,000 charities currently claim Gift Aid, and will need to review the systems they are currently using.
For larger charities (with over 1,000 members), the online system gives charities the opportunity to connect their databases directly to the HMRC computers and submit their Gift Aid claims, or make claims by uploading data using a template spreadsheet, which will apparently make it much easier to administer.
and there are more changes expected…
It doesn’t stop there; more changes are expected. There has been recent talk about the Charity Commission suggesting charging charities, or top-slicing Gift Aid, to fund its services. This came about as a result of the recent cutbacks made by the Government and the Treasury, suggesting that all government departments make further savings of 10 per cent to their spending in 2015/16.
The Charity Commission is unique among regulators, as it gets no funding from those it regulates (unlike Companies House, which charges a range of fees depending on the service you use), and makes a series of suggestions for achieving a more sustainable funding model. Added to this, they state that it cannot sustain a further funding cut expected in the government’s upcoming Spending Review… so be warned if this is agreed, you just might receive an unexpected fee if you’re a registered UK Charity.
The Gift Aid Small Donations Scheme
If you are not currently claiming Gift Aid, then you might want to question, Why not? Even as a small charity/church you could be entitled to “The Gift Aid Small Donations Scheme (GADS)”
The Scheme applies to cash donations of £20 or less, received after 6 April 2013. Charities will need to meet certain conditions so they can qualify for the Scheme. If they do qualify, a charity could claim a top-up payment of up to £5,000 of small cash donations in a tax year – depending on certain circumstances.
Case Study – Christ Apostolic Church, Stockwell
Christ Apostolic Church, Stockwell is a branch of the Christ Apostolic Church Worldwide. The Pastor had come from a church where they had experienced difficulties making Gift Aid claims and responding to audits, and was keen to avoid the same happening at Christ Apostolic Church.
Seeing the individuals responsible for handling their Gift Aid;, not always having the time required to fulfil their Gift Aid tasks, along with overflowing heaps of donation envelopes which needed a secure place to be stored to avoid damage or loss, it was a straightforward decision to partner with Good to Give, a professional company specialising in Gift Aid management. They are now successfully making regularly Gift Aid claims, which helps them achieve their aims and grow their ministry.
Courtesy of www.goodtogive.co.uk June 2013
Remember, you can also claim Gift Aid backdated for up to four tax years prior to the current tax year. Just think how your church could benefit from this extra source of income: evangelistic outreaches, building/structural renovations, new minibus/sound system… the list is endless, so make sure you sign up today!
For more details, visit www.hmrc.gov.uk/individuals/giving/gift-aid.htm