Gift Aid – a short guide
Gift Aid is an arrangement that allows charities (including churches) to reclaim tax on a donation made by a UK taxpayer. This means every donation will be worth 25 per cent more, at no extra cost to the giver. For example, with Gift Aid the charity can claim an extra 25p for every £1 donated, which makes a huge difference.
Please scroll down for guidance on claiming Gift Aid, the Gift Aid Small Donations Scheme (GASDS), and use of the Parish Giving Scheme (PGS) in the event of a parish merger.
Example Gift Aid Declaration – Single Donation
Example Gift Aid Declaration – Multiple Donations
It’s easy to complete your Gift Aid Declaration, which can also be declared by email or over the phone.
Gift Aid Small Donations Scheme (GASDS)
The Gift Aid Small Donations Scheme (GASDS) allows parishes to claim a grant on small cash donations up to a maximum value of £30 and a threshold of £8,000 per tax year per church (from April 2019). This includes contactless donations, on which Gift Aid can be claimed on the gross amount pledged rather than the amount net of transaction charges.
Whilst you’ll need to keep evidence showing when the cash was collected, you don’t need a Gift Aid Declaration to claim under the GASDS. GASDS is claimed alongside a normal Gift Aid claim using the same process.
For further guidance please click on the links below:
Gift Aid and Gift Aid Small Donations Scheme (Church of England Guidance)
Gift Aid (Government Guidance)
Gift Aid Small Donations Scheme (Government Guidance)
Parish Mergers
Gift Aid, GASDS and the Parish Giving Scheme
The following provides general guidance for PCC Treasurers and Church Officers on handling Gift Aid claims when two or more PCCs have merged into a single PCC. Please note that this guidance does not replace advice from the diocesan registrar, the independent examiner or auditor, or a specialist charity adviser.
Each Parochial Church Council (PCC) is a separate charity in law. The creation of a new parish does not automatically transfer the former PCC(s) HMRC Gift Aid registrations. Where the reorganisation creates a new PCC, that PCC is a new legal entity and should promptly apply to HMRC for recognition for charitable tax purposes, obtain its own HMRC charity reference, and enrol in Charities Online. Where one or more former parishes are instead transferred into an existing PCC, the surviving (successor) PCC should confirm this to HMRC. In either case, HMRC will require details of the reorganisation, including the new or successor parish’s governing arrangements, bank account, authorised officials, and responsible persons. HMRC must also be notified of the merger and the closure of each former PCC. The notification should identify the former PCC(s) and their HMRC references and state the effective date of the legal instrument. The former PCC(s) should agree with HMRC which charity is to submit any outstanding claims for donations received before the effective date. Former repayment accounts should not be closed until all final claims have been resolved and paid.
Ordinarily, Gift Aid declarations must identify the charity receiving the donation. A new or successor PCC should not rely on declarations naming a former PCC unless HMRC has confirmed in writing that they may continue to be used following the reorganisation. Where HMRC gives that confirmation, donors do not need replacement declarations solely because of the reorganisation. New donors should use declarations identifying the new or successor PCC. All declaration and donation records must be transferred securely to the new or successor parish and retained for at least six years after the most recent donation claimed under them. Donation forms, collection envelopes, standing orders, online-giving platforms and Parish Giving Scheme (PGS) records should be updated from the effective date.
Entry on the Charity Commission Register of Mergers should be dealt with separately, where applicable; registration of the merger does not, of itself, transfer Gift Aid declarations.
Parish Giving Scheme (PGS)
A new parish may wish to set up all donors directly with a new parish PGS account, so they receive one statement. However, this single statement will not distinguish donors from different churches. If it is felt that donors would prefer to give via the PGS to an account bearing the name of their local church, existing accounts for participating churches can be retained by applying to PGS, via a designated form, to change the bank account that distributes donations and gift aid to one designated by the new parish for this purpose (e.g. the new parish main bank account). The ‘statement receiver’ may also be changed by completing the appropriate form.
Gift Aid Small Donations Scheme (GASDS)
Following a merger, GASDS claims should be made centrally in the name of the merged parish PCC, using its HMRC charity reference. Individual churches, DCCs or LCCs do not make separate claims. The merged parish PCC may still benefit from the community building rules in respect of each qualifying church building; HMRC guidance provides examples here.
Where to Get Help
• HMRC Charities helpline: 0300 066 9197. Opening times: Monday to Friday, 8:30 am to 5 pm.
• HMRC Gift Aid Small Donations Scheme (GASDS) HMRC chapter-8
• HMRC Charity guidance: https://www.gov.uk/claim-gift-aid
• Charity Commission Register of Mergers: https://www.gov.uk/government/publications/register-of-merged-charities