Before a Charity can reclaim tax on a donation made by an individual, it must have received a Gift Aid Declaration from the donor containing certain information and confirming that the donation is to be treated as Gift Aid. Without this declaration a donation from an individual will not qualify for Gift Aid
• In advance of their donation, at the time of their donation, or at any time after their donation (subject to the normal time limit within which tax can be reclaimed - usually six years).
• It covers a single donation or any number of donations.
• In writing or orally.
Anyone whose donations to the Church are made out of taxed income can complete a Gift Aid Declaration. Therefore anyone in the following categories can Gift Aid. Individuals who are resident in the UK and are:
• Working and paying UK income tax under PAYE.
• Self-employed UK taxpayer.
• Retired and paying UK income tax on a pension.
• Not working but paying UK income tax on investments.
• Paying UK income tax on unearned income (shares / rents/etc.)
• Individuals who are Crown servants or members of the UK armed forces serving overseas.
• Other non-resident individuals, provided they have income or capital gains charged to UK tax at least equal to the gross amount of the donation (i.e. the donation before deduction of basic income tax.)
All gifts to the Church for which a material benefit cannot be gained. There must be documentary evidence tracing the payments made by the individual donors and the donations must be banked in the parish bank account.
• Offertory Contributions.
• Special Collections authorised by the Trustees as listed in the Diocesan Calendar (but not for those which are for the benefit of third party charities.)
• Christmas and Easter Offerings.
• Second or retiring collections for parish purposes.
• Mass Stipends provided that they are properly recorded in the Parish Mass Register in accordance with the provisions of Canon Law and that their receipt is properly documented and identifiable.
• Stole Fees.
• Additional donations given by individuals throughout the year.
Outright payments to a Charity in return for services, rights or goods are not gifts to Charity and so are not eligible for Gift Aid Tax refund. Therefore, payments for Catholic papers, C.T.S. pamphlets, football pools, clubs, bingo, raffles or totes, bazaars or fetes, gifts in kind or work for the benefit of the parish do not qualify.
Also payments that have already received tax relief cannot be treated as Gift Aid donations i.e. under a Payroll Giving Scheme or by Charity voucher.
As documentary evidence is required to verify the receipt of each donor's contributions, it is recommended that one of the following methods of giving are used:
• By numbered and dated weekly envelope.
• By Bankers Order.
• By cheque.
Donors have to pay an amount of UK Income Tax and/or Capital Gains tax, at least equal to the amount that the Charity reclaims on their donations.
Donors can be paying tax at the Lower rate/Basic rate/Higher rate/on a Pension or on income from investments. Higher rate taxpayers who Gift Aid their donations can earn additional tax relief if they declare their Gift Aid donations on their self-assessment tax returns. Those higher rate taxpayers who wish the Charity to receive this benefit should increase their level of giving by 30p for each £1 previously given. The Gift Aid Office can supply a leaflet which explains how this works. As the position of a taxpayer making Gift Aid donations can change from one tax year to the next, it is recommended that Charities remind donors of the need to have paid sufficient income tax on their donations.
This can be done by means of a separate letter to each donor or a note in the Parish Newsletter prior to submitting the annual claim.
However, it should be noted that the individual donor is responsible for ensuring that he/she is paying sufficient tax to cover any refunds which may be reclaimed by the Charity.
Written Gift Aid Declarations must be in the Declaration format used by the Diocese and must contain:
• the Charity's name
• the donor's full name
• the donor's full postal address and postcode. This helps to establish an audit trail and is an Inland Revenue requirement for audit purposes.
• 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 requirement that the donor must pay an amount of tax at least equal to that claimed by the Charity.
• any additional notes or information which the Charity considers necessary.
• the donor's signature
• the date of the declaration
Oral Gift Aid Declarations must contain the same information as a written declaration except for the last two points but in addition they should show the following information:
• a note explaining the donor's entitlement to cancel the declaration retrospectively within 30 days
• the date on which the declaration was taken
• the date on which a copy of the declaration was sent to the donor
When a parish receives an oral declaration, the donor's details must be recorded on the Declaration form and marked `Oral'. A copy must be taken and sent to the potential donor, who then has 30 days to change his/her mind about the declaration. If nothing is heard further from the donor, then the form should be sent to the Gift Aid Office after the 30 days have elapsed.
Please note that the Diocese continues to recommend getting written Gift Aid Declarations in preference to Oral Declarations.
The Donor should print his/her title, full name and address, which must include the postcode.
The form must be completed in ink.
Joint names are not acceptable
The Donor should tick one of the two options in respect of commencement of the Declaration.
The donor should sign the Declaration and enter the date on which the Declaration was completed.
From 1st April 2000 Gift Aid donations made by companies to charities must be paid without deduction of income tax. A Gift Aid declaration is not required
A company simply makes the payment to the Charity and deducts the amount when working out its profits for corporation tax purposes.
Sole traders give through Gift Aid as any individual would and must complete a Gift Aid Declaration. Any donation will be treated as paid out of taxed income and the Charity will reclaim basic rate tax on it from the Inland Revenue.
Parishes can submit interim claims for those donors who make one-off payments in excess of £1,000 and should send the Gift Aid Office a photocopy of the cheque and also a photocopy of the paying-in slip. If the cheque is not signed by the donor but is in the form of a banker's draft, then the donor should sign a declaration that the cheque has been drawn on his/her bank account.
Donors of large amounts i.e. £10,000 or more should be aware that all donations must come out of taxed income and not from a legacy etc.
Donors are entitled to cancel their declaration at any time. They may do so by notifying the charity in any form of communication (i.e. letter, telephone, verbally etc.) The charity should keep a record of the cancellation, including the date of the donor's notification. Any donations received before the date of notification will still qualify as Gift Aid donations.
If a donor, who has made an oral declaration, cancels it within the period of 30 days after being sent the written record, the cancellation will have retrospective effect, so it will be as if the declaration had never been made.