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 before and after PCC mergers.
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)
Gift Aid and PCC Mergers
What follows provides information for PCC Treasurers and Church Officers about how to handle Gift Aid claims when two or more PCCs have merged to form a new single PCC. It explains what can be claimed, when, and by which charity, to ensure compliance with HMRC rules.
Background
Each Parochial Church Council (PCC) is a separate charity in law. When PCCs merge to form a single new PCC, the original charities effectively cease to exist, even if their bank accounts remain open for a time to complete financial matters. Gift Aid is legally tied to donations made to a specific charity, so HMRC will only accept claims by the charity that received the donation.
A. Merger registered with the Charity Commission
If the merger has been formally recorded on the Charity Commission’s Register of Mergers and HMRC has been notified, the new PCC can normally continue to claim Gift Aid on donations made to the former PCCs.
The new PCC should write to HMRC Charities confirming the merger, listing the predecessor PCCs and their HMRC Gift Aid references. Once HMRC confirms, all future claims can be made under the new PCC’s details. Donors do not need to complete new Gift Aid declarations unless they have objected or withdrawn consent.
B. Merger not yet registered with the Charity Commission
If no formal merger has been registered, each former PCC should make its final Gift Aid claims for all eligible donations received up to its merger date, using its existing HMRC reference. No claims for those donations can be made by the new PCC. After final claims and payments are received, the pre-merger bank accounts can be closed.
The new PCC should then register with HMRC Charities (if not already done so) and collect new Gift Aid declarations in the name of the new PCC for all future donations.
Checklist
- Confirm whether the merger has been entered on the Charity Commission Register of Mergers.
- If not registered, submit any outstanding Gift Aid claims for each former PCC using existing HMRC references.
- If the merger is registered, write to HMRC Charities confirming the merger and ask for authority to claim under the new PCC.
- Keep copies of merger resolutions, bank statements, and correspondence with HMRC.
- Update Gift Aid declaration documentation and donor communications to reflect the new PCC name.
Key Points to Remember
• HMRC will not pay Gift Aid to a new charity on donations to a former one unless the merger has been properly recorded and notified.
• Each claim must relate to the charity named on the donor’s declaration unless HMRC has confirmed that the new PCC may claim Gift Aid as the successor charity following a registered merger.
• Once final claims are made and funds received, the old bank accounts can safely be closed.
Where to Get Help
• HMRC Charities helpline: 0300 123 1073. Opening times: Monday to Friday, 8:30am to 5pm.
• 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