The new tax year has begun, but it’s not too late for your members to make a tax-efficient gift for 2022-23.
As you’ll know, your members can only claim Gift Aid on a donation if they’ve paid enough income or capital gains tax in that year to cover the basic rate tax your church will reclaim.
So if a member’s income has gone down since last year, for example because they’ve retired or taken maternity leave, they might not pay enough tax to give under Gift Aid this year. Instead, your member could ask HMRC to carry back their donations and treat this year’s donations as if they had been made last year.
Assuming your member paid enough tax last year to cover the Gift Aid on both last year’s and this year’s donations, carry back will boost the value of the member’s donations to your church this year by 25p for every £1.
Carry back is also useful for givers who have a variable income, perhaps because they are self-employed. They can wait until they’ve prepared their accounts for 2022-23, work out how much they can afford to give under Gift Aid for that year and then make a donation now, asking HMRC to carry it back to last year.
So how can your giver carry back Gift Aid? If your giver completes a tax return, they can simply fill in the box which asks how much of the current year’s giving should be carried back to the previous year. There’s just one catch – a giver who needs to complete a tax return can only carry back a donation if they do so before filing their tax return. Once they’ve filed their tax return then it’s too late to carry back donations, even if they’ve filed long in advance of the deadline.
Givers who don’t file a tax return can ask HMRC for a form P810, which they will need to submit by 31 January 2024.
If you’d like more information about Gift Aid carry back, you can find details on the HMRC website and we’ve also prepared a briefing paper on the subject: Gift Aid Carry Back.
Rachel Steeden
Rachel is a solicitor with 17 years’ experience advising private clients and charities. She enjoys working closely with clients and their advisers to help donors make complex gifts effectively and tax-efficiently.
She is a member of the Charity Law Association, STEP Special Interest Group for Philanthropy, Lawyers in Charities and Lawyers’ Christian Fellowship. She is also on CityWealth's prestigious Top 10 Philanthropy Advisors 2024 list.
Rachel and her husband Derek lead a Bible study group at their church in central London.
They’re passionate about Church Planting in the UK and overseas, Bible translation and The Local Church.
