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What you may have Forgotten about Gift Aid Declarations

Photo of Kevin Russell Kevin Russell
4 min

We are all familiar with Gift Aid and, for the most part, just get on with it. But there are specific requirements of the Gift Aid scheme. Some of these are ‘best practice’ but a few are legal requirements.

Over time, recollections can become rusty, are passed on verbally as personnel change or knowledge can simply become out of date. So it is useful to remind ourselves of the current requirements from time to time.

  1. What content is required on a Declaration?

HMRC has published model forms of Declaration which will satisfy their requirements. However, if a church wishes to depart from the model forms, it must ensure that its own Declaration contains:

  • The home address of the donor. Work addresses or ‘c/o’ is not acceptable.
  • The name of the donor and of the charity. HMRC strongly prefer full forenames of the donor to be stated.
  • The identity of the gift or gifts to which it relates. This may refer to a one-off gift or ‘…to all gifts that I make after… [date]’.
  • Confirmation from the donor that their gifts are to be ‘Gift Aided’.

Point 2 below does not need to be in the Declaration itself but it is sensible to include it to avoid overlooking the additional requirement.

  1. What must also happen?

A charity cannot reclaim Gift Aid unless at the time the Declaration is given, the donor is made aware that if they have not paid sufficient tax to cover the tax that will be reclaimed by the charity, they themselves will have to make up the difference to HMRC.

It follows that it is good practice to periodically check (perhaps every few years) with donors that their Declaration continues to be up to date. For example, to check that personal details including home address remain correct and to re-confirm that they continue to pay enough income or capital gains tax to cover the Gift Aid on their donations. Around 50% of the adult population now pay little or no income tax.

  1. Does a Declaration need to be signed and dated by the donor?

Curiously, there is no legal requirement for a Declaration to be signed or dated. However, it is advisable to ask donors to do both, as a matter of best practice. This will help evidence that they did agree to their donations being Gift Aided and the date may help establish which donations the Declaration applies to.

  1. Does the Declaration need to be in writing?

In strict legal terms, a Declaration can be given in writing or orally, including by ‘written or oral’ methods of electronic communications. However, where a Declaration is given orally or by digital communication, charities should be mindful of the need to provide an auditable record of the Declaration. HMRC give examples of acceptable forms of record in Paragraph 3.7.2 of the Detailed Guidance Notes. Further information on requirements around oral Declarations is given in Paragraph 3.10.1 of the Detailed Guidance Notes.

  1. What about joint giving between husband and wife?

HMRC has published Guidance on joint giving and joint Declarations which can be found in Paragraph 3.10.2 here. Note that the charity must make a separate claim for each donor.

  1. When can a Declaration be given?

A Declaration can be given at any time in advance of the donation(s), at the time of a donation or at any time after making a donation subject to the normal four-year time limit for a charity to make a Gift Aid claim.

  1. How long must Declarations be kept?

In some cases, it will be necessary to retain ‘an auditable’ record of an individual’s Gift Aid Declaration for a long period of time where they are a regular donor to the church. The time limit is six years from the end of the tax year in which the last donation is made. An auditable record includes evidence of compliance with point 2 above.

  1. And finally…

Gift Aid Declarations contain personal data. Don’t forget that the church has a legal responsibility to securely look after the data obtained on the Declaration and to retain it for no longer than is strictly necessary (on this, see Point 7 above).

 

Claiming Gift Aid as a charity or CASC: Gift Aid declarations - GOV.UK

A Guide to Gift Aid Claims and Declarations

Comments

Harvington Hall-Kidderminster-a local Medieval attraction-is charging(according to their Fb page) a Gift Aid charge (£1) on top of their admission charge
Is this correct-or even legal-I believe that the Gift Aid was the amount of the charge that was taxable-and the venue could claim it back from the Govt?

@David, Thanks for your comment.

There are separate Gift Aid rules in relation to what may loosely be called 'heritage property' attractions. These attractions are permitted to accept Gift Aid on their admission charges where they either grant an annual admission to the property, or, the gift that grants a right of admission is at least 10% more than the admission charge made to the general public.

According to their website, Harvington Hall's general admission price is £10. Therefore if one makes a Gift Aid gift of £11, admission to the property can be granted and the benefit arising does not affect the eligibility of the £11 for Gift Aid purposes.

Please note that these are special rules for heritage type properties that do not apply more generally to gifts under Gift Aid.

In reply to by David Hubball

I have recently been made the treasurer of our local church & know nothing about gift aid, how do i find out whether the members most of us whom are tax payers are gift aid members. I remember signing what they called then a covenant form many years ago. If needed what do I need to do to gift aid their donations as our church is struggling at the moment! Thank you any advice will be very helpful! Gwenda Morgan

@Margaret

Thank you for your comment.

Gift Aid is simple in concept but can have many nuances that add layers of complexity. But, in the church context, you should be able to keep it fairly simple!

Any church member (or visitor for that matter) that make a gift to the church which is 'a payment of a sum of money' can, if they are a taxpayer, give the church a Gift Aid Declaration. This declares that they are a taxpayer and want their donation to be Gift Aided. So long as the church is recognised as a charity by HMRC, the church can then claim back the basic rate tax that the donor will have paid on their donation. The amount that can be reclaimed is 25p for every £1 given. Claims are made to HMRC online and the tax is repaid directly to the church's bank account. Whilst it is possible for a very old deed of covenant to stand in the place of a declaration, this would be highly unusual now since the Gift Aid scheme, which has now been in place for 32 years, largely replaced the need for deeds of covenant following the removal of a minimum sum for a Gift Aid donation in 2000.

Below, I suggest some resources that you may find helpful. But if you email [email protected] with your contact telephone number and ask the team to forward this to me, and I can then call you to understand your needs more specifically and to guide you as necessary.

If you are nervous or unsure how to proceed, we can handle all of the gift aid donations made in support of your church. I can discuss this further with you on the phone but you can see some details of what we can offer at www.stewardship.org.uk/partner-account-churches-and-charities

Some other resources that we can provide include:

- Our consultancy helpline: www.stewardship.org.uk/consultancy-helpline

This is a cost effective annual subscription providing unlimited telephone and email support from our range of professional consultants on charity law, tax, finance, governance, property, HR and more.

- Our quarterly Treasurers' Dial In

Our highly regarded regular free lunch time webinar / telephone dial in providing up to date news on issues and themes affecting church treasurers. You can sign up here: www.stewardship.org.uk/event-series/lunchtime-dial

- Gift Aid Small Donations Scheme (GASDS) Briefing Papers

For smaller cash donations (£30 or less), there is no need to get a Gift Aid declaration from donors. You can simply claim a Gift Aid like top up from HMRC on all cash donations up to £8,000 per annum in value (sometimes more if the church has several buildings). More information is given in our:

Practical Guide to GASDS - www.stewardship.org.uk/resource/gift-aid-small-donations-scheme-practic…
Comprehensive Guide to GASDS - www.stewardship.org.uk/resource/gift-aid-small-donations-scheme-compreh…

- Gift Aid and other Treasurer resources on our website including briefing papers on Gift Aid themes

There are a whole host of free resources on our website. A good place to start browsing is the 'Build A Cause' tab (www.stewardship.org.uk/build-cause) and the 'Resource Hub' tab (www.stewardship.org.uk/resource-hub). If you hover over the tab names, an additional banner menu will appear from which you can access more tailored resources.

There are some external descriptions of the Gift Aid scheme that we can look at together over the phone. Some are better than others!

In reply to by Margaret gwend…

Is it still correct to be able to claim Gift Aid on items given to the church to sell to someone else, as well as on straightforward donations?

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Written by

Kevin Russell

Kevin is one of Stewardship’s leading team of technical experts with over 25 years of experience of helping churches and Christian charities maximise their potential. His expertise and knowledge is sought not only by charitable organisations but by Government, the Charity Commission and HMRC, helping to solve complex tax and charity law problems.

Prior to working for Stewardship, Kevin had a wide range of business, charity and teaching experience and is a qualified chartered accountant, and a chartered tax advisor. At PwC he was a Senior Tax Consultant assisting medium and large businesses in all aspects of their tax affairs. Also a lecturer in the Business School at Middlesex University and Principal of his own Chartered Accountancy practice.

Kevin is Vice Chair of the Charity Tax Group and Chair of CTG’s Gift Aid & Giving Technical Group. He represents the Christian church on HMRC’s Charity Tax Forum and advocate for the sector to Government, the Charity Commission and HMRC.

Currently a trustee of the UK arm of an international charity that inspires people to discover Jesus for themselves. Past roles include church deacon, trustee and auditor and he has helped set up two church plants.

Kevin and his wife Carol have 3 adult children and one grandchild.  They attend Grace Church, Highlands in North London.

Causes close to Kevin and Carol’s hearts are those working directly with the homeless, with drug addicts, and women in prostitution. Organisations working in evangelism amongst young people, in family life and demonstrating Christian love in action in the public sphere.

 

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