This note relates only to matters that are relevant to the Essex Association of Change Ringers, it is therefore not a comprehensive guide to the gift aid provisions. If anyone would like further details, please do contact me.
Guide to Gift Aid
Gift Aid and Declarations
What is Gift Aid?
Gift Aid enables givers to increase the value of their subscriptions or donations to the Essex Association. Provided you are UK taxpayers, I can reclaim from HM Revenue and Customs (HMRC) the basic rate tax paid on the gifts, boosting the subscription or donation by 25% - a gift of £8 from a donor is worth £10 to the Association. Subject to a few simple rules, donors can give any amount of money, large or small, regular or one-off, and the Association can reclaim the tax. All I need from a donor is a simple Declaration saying that they want to use Gift Aid. A declaration can cover one or more donations, and it can be made in writing, by email or orally. It can also cover donations over the previous four years.
There is no minimum limit for gift aid donations and I can reclaim tax on all donations, large or small. However, I must be able to identify the donor and show proof of payment. It is therefore essential that a receipt is issued for ALL donations where tax relief is to be claimed. For this reason, collections at District services, for example, are currently excluded, as it is not possible to identify a donation with a particular individual although the Government have announced that as from April 2013, charities may claim Gift Aid on up to £5,000 of small donations a year — typically given in collections — without the need for declarations. However, I have introduced gift aid envelopes for use at the Association’s AGM service in May and for Association Carol services, which have proved a useful source for increasing gift aided funds.
The Gift Aid Declaration
The Declaration is the most important part of Gift Aid, as it records the information required by HMRC to allow you to reclaim the tax paid on the donations. The Gift Aid Declaration must contain:
- The name of the charity
- The donor’s full name (however first name and surname, or initials and surname are acceptable, providing they can be clearly identified).
- The donor’s address and postcode
- A description of the donations to which the declaration relates
- A declaration that the donations are to be treated as Gift Aid donations
- A note explaining the tax requirement
- The donor’s signature
- The date the Declaration was signed
Oral Declarations
Declarations may be made orally over the telephone or even in person preferably to myself of a District Treasurer. A written record of the declaration must be sent to the donor showing:
- All the details provided by the donor in his/her oral declaration, i.e. full name; full address; post code; the charity’s name; a description of the donations to which the declaration relates; a statement to the effect that the donor wants his donations to be Gift Aid donations
- A note explaining that the donor must pay an amount of income tax or capital gains tax equal to the tax deducted from his or her donations
- A note explaining the donor’s entitlement to withdraw the declaration retrospectively at any time within the period of 30 days after the copy declaration was sent to them
- The date on which the donor gave you the declaration
- The date on which you send the written record to the donor
An oral Declaration is not effective unless and until I have sent the donor a written record. Once I have sent the written record, I will be able to reclaim tax in respect of any donations covered by the declarations, even if I received them before I sent the written record.
Cancelling a Gift Aid Declaration
A donor can cancel a declaration at any time. The cancellation takes effect from the date a donor notifies me of it, or such later date that the donor specifies, i.e. it is not retrospective. Any donations received before the date of the donor’s notification will still qualify for Gift Aid. You need to keep a record of the cancellation, including the notification date. Where a donor’s circumstances have changed and they no longer have paid enough tax to cover donations already made before they cancelled the Declaration, I do have the option of not claiming for that donor.
For oral declarations, if the donor cancels 30 days after I sent the written record, the cancellation takes effect from the date the donor notifies me, or such later date as specified. If the donor cancels within the 30 days, the cancellation has a retrospective effect, as if the Declaration was never made.
Amendments to Declarations
I do not need to get a replacement Declaration when a donor changes his/ her name or address. The Declaration itself does not need to be amended, but I do need to keep a record of the change.
Existing Deeds Of Covenant
Deeds of Covenant already in force at 6 April 2000 will continue to be valid. However, any donations made outside the terms of that covenant (which only cover subscriptions) will need to be covered by a new gift aid declaration. I will be asking that individuals replace their existing covenant with a gift aid declaration.
Payroll Giving Or Gifts Of Listed Shares And Securities
Please ask me for further details of how you can make donations under this scheme.
Giving to Charity through your tax return
If you complete a self-assessment tax return you can donate all or a percentage of a tax repayment owed to you to the Association. Providing you have paid enough you can ask that HMRC automatically Gift Aid to your self-assessment donation, thus ensuring that your gift goes further to supporting the Association.
Self Assessment Giving has a number of advantages:
- It offers an easy way to donate your tax refund to the Association
- The Association receives your donation (plus any Gift Aid) directly into its bank accounts without having to make the claim to HMRC
- You can increase the value of your repayment by ticking the relevant box on your tax return to ensure that Gift Aid is automatically added to your donation.
How do I donate to the Association via my tax return?
If you file your tax return online or through the post you can select the Association to receive either all or part of your tax repayment by completing the Giving your tax repayment to Charity form, which will have been sent to you in your tax return pack.
When completing your form the code for the EACR is SAE63XG.
Once HMRC have calculated your tax repayment, they will send you a calculation showing how much your repayment is and when it was sent to the Association.
How do I add Gift Aid to my donation?
If you want to ensure that the Association receives any Gift Aid that is due on your donation, please tick the relevant box on the form titled Giving your tax repayment to Charity Form or when promoted if you are filing your tax return online.
HMRC will then automatically add any Gift Aid that is due on your donation, when they send your repayment to the Association.
Please note in order for your tax repayment donation to be Gift Aided you must have paid at least as much tax as the Association will receive from your gift.
Further Information
If you have any questions or would like further details, please do not hesitate to contact me (details in the Annual Report or Contacts page of the website).
Andrew Brewster
Honorary Treasurer
6 April 2011
Instructions for completion of the GIFT AID declaration
- In Writing
- Please download the declaration, complete the various sections, sign it, and then send the completed form to me at 9 Chancery Place, The Green, Writtle, Essex CM1 3DY.
- Via the Internet
- Please download the declaration, complete it and return it to me as an email attachment, or copy the whole of the wording and other details into the main body of an .
- Orally
- When you speak or telephone me (my number is 01245 421166) please let me have all the details as set out in the formal declaration:
- full name
- address including postcode
- details of the payments to be covered by the declaration. For example: “all payments I make to the charity from the date of this declaration until I notify you otherwise”.
