What is Gift Aid?Gift Aid is the scheme used by charities and Donors to reclaim tax on charitable giving. It replaces the old ‘Deed of Covenant’ Scheme (which was for fixed amount giving) and the old ‘Gift Aid’ Scheme (which was for single donations of more than £250)
So What does it mean?
It means that if you are a tax payer, the Church can reclaim tax on all your donations, increasing income by almost a third again on top of what you give. It can cover all giving, whether by weekly or monthly offertory, irregular donations, or single one-off donations. Your tax is repaid to charities at the basic rate equivalent, but as long as you have paid enough tax, whatever the rate, then your giving is eligible.
Overall, for every £1 you give, the Church will get an extra 28p. So if you give £2 per week, that’s £104 in a year coming from your taxed income. If you pay tax at the basic rate of 22%, you have already paid £29.33 in tax on that £104. The Church will get that back from the Government.
Or for a single donation of £50, which comes from your taxed income, the Church can reclaim the £14.10 of tax you have paid on it.
It applies to income tax or capital gains tax, at whatever rate you pay, as long as you have paid sufficient tax for a reclaim to be made. If you pay tax at the higher rate you will receive additional relief.
How does it work?
You make a ‘Gift Aid declaration’ to the Church, in writing, and the Church can then reclaim the tax you have paid. There has to be a record of what you give, so we ask you either to use envelopes for cash, give by cheque, or give by bankers order. The declaration will cover everything you give.
What’s the difference between this and the old covenants?
There are several differences:
- A declaration is not a legal document tying you to a fixed amount for a fixed period.
- A declaration is flexible, it covers whatever you give at any time, however large or small.
- The new scheme is better for the Church, because it will capture giving that may have been in excess of the level of your old covenant.
What does it cost me?
It costs you absolutely nothing! You are giving to the Church anyway, this simply asks the Government to redirect to the Church some of the tax you have paid to them.
What if you pay the tax at the higher rate?
Better still, if you are a higher rate tax payer. You will receive additional relief, which you will need to claim via your tax code. Seek advice from the Inland Revenue.
What happens if I stop paying enough tax?
Simply ask the Parish Treasurer to cancel your declaration. If you don’t, then you could be sent a bill by the Inland Revenue for any tax claimed by the Church that you have not paid. If in future you start paying sufficient tax again, you can make a new declaration.
What should I do now for the Church to benefit from my tax?
Simply contact the Parish Treasurer for a Diocesan Gift Aid Form or for any further information. A sample of which is printed below.
You can get in touch with the Parish Treasurer by ringing the Parish Office: