For full information on Gift Aid and GASDS please see HMRC's website.
Following the Spring Budget 2022, it has been confirmed that the amount claimable through Gift Aid will remain at 25% (equivalent to 20% taxed) until 2027, even though income tax is reducing to 19% in 2024. For further information read here and here.
Frequently Asked Questions
What is Gift Aid?
Gift Aid is a HMRC scheme, where charities are able to claim back 25p every time a qualifying individual donates £1 to them.
In order to claim this, charities will usually need to be registered with the Charity Commission for England and Wales, however churches within the Church of England, do not necessarily need to register, but are often considered "Excepted Charities".
What can we claim Gift Aid on?
Gift Aid can be claimed on donations to your church from an individual when the donor fits certain criteria (detailed in the next question). As it is a donation there are special rules if the donor receives any benefit from their donation, such as a gift. Unless you are specially registered with a charity shop, you are not able to claim Gift Aid on the sale of items donated to the charity. You are not able to claim Gift Aid on items that are bought to be sold.
Some donations given through a third party, such as through PGS, CAF and Stewardship, have already had the Gift Aid applied by the third party, and so you are not able to claim Gift Aid on these.
You need to claim on donations within 4 years of the end of the financial period you received it in.
To find out more about some of the special rules about claiming Gift Aid, click here.
What must the donor do?
In order for a donor to be eligible for Gift Aid, the donor must have:
- paid at least as much in Income Tax or Capital Gains Tax in that tax year as you want to claim in Gift Aid.
- made a Gift Aid declaration that gives you permission to claim it.
The Gift Aid declaration must include the name of the charity and charity number (if relevant), a declaration agreed to by the donor stating that they have paid enough in Income or Capital Gains Tax for Gift Aid to be claimed (this can be done through a tick box), the donor's full name and their home address.
Signatures are no longer required on Gift Aid declarations, though some form of assent to the declaration is needed.
Declarations can also be made electronically (such as through an email) or orally (such as over the 'phone). If a declaration is being made over the 'phone, in order to keep the declaration, we suggest that the details are filled in on a paper form and that it is noted on the page that the details were taken over the 'phone, given the name of the recorder and the date.
Examples of Gift Aid declarations can be found here.
What do we need to do with the declaration?
You must keep a record of Gift Aid declarations for at least 6 years after the most recent donation you claimed through Gift Aid. This can either be keeping the original declaration (if paper), or scanning them and keeping them electronically.
In either case, you must ensure that this is done securely and in compliance with GDPR.
Do we need to provide a receipt?
If a donor asks for a receipt for their donation you should provide this. This may be to better manage their own finances, or because if they are a 40% tax payer, there are additional benefits they can claim through donating to charity.
However, even if a receipt is not asked for, it is still good practice to write to all your regular donors annually to thank them for their gift, which could include a receipt as well. For some more ideas on how to do this, please visit the Trust section of our Enabling Giving webpage.
What is GASDS?
You may be able to claim 25% on:
- cash donations of £30 or less
- contactless card donations of £30 or less collected on or after 6 April 2019
This is called the Gift Aid Small Donations Scheme (GASDS) and you do not need a Gift Aid declaration from the donor to claim. From 6 April 2016, you can claim on up to £8,000 of donation (so receive up to £2,000 in a tax year or £1,250 for earlier years).
Your GASDS claim cannot be more than 10 times your Gift Aid claim. For example, you can claim on £1,000 worth of donations through GASDS if you’ve received £100 of Gift Aid donations in the same tax year.
You need to record the:
- total cash donations collected
- date of the collection
- date it was paid into a bank account
You’ll need to keep records of any contactless card donations that you’ve taken, for example receipts from your card machine.
For more information click here.
How do we claim?
There are a number of programs available for claiming Gift Aid, and depending on the number of donors you have you may wish to look into these. However, if you have a small number of donations you can claim Gift Aid by sending HMRC a spreadsheet of your donations.
Also, for your regular givers, do consider the Parish Giving Scheme, which will claim the Gift Aid on your behalf.
For more information, including HMRC's donation spreadsheet, click here.
Another helpful guide from the Association of Taxation Technicians, can be found here.
Diocesan Gift Aid Scheme
The diocesan office runs a Central Gift Aid Scheme which is available to all churches in the diocese. The scheme helps churches to maximise their income by making tax reclaims on their behalf on both their regular and pew donations. This includes the Gift Aid Small Donations Scheme (GASDS) which allows a Church to reclaim from HMRC on a further £8,000 per tax year on all cash and contactless donations under £30 per donation. We do make a small charge for this service.
If you are interested in learning more about the central scheme or if you have any questions about the scheme you are running in your church please contact Sucki Dhaliwal, Gift Aid Officer.