1 1 Gift Aid Small Donations Scheme November 2018 What will we cover? • Details of the scheme • How to take advantage of the scheme • How to claim: non Diocesan Scheme parishes • Questions 2 Gift Aid Small Donations Scheme • Introduced in Budget 2011 • Small Charitable Donations Act 2012: became law on 19 December 2012 • Took effect from 6 April 2013 • Changes from 6 April 2017 • GASDS or Small Donations Scheme for short 3 The Small Donations Scheme • Allows charities to apply for a Gift Aid style repayment • On small cash donations of £20 or less then donations of £30 or less from April 2019 • Without the need to obtain Gift Aid Declarations for those donations 4 The Small Donations Scheme • Can claim “top up” payment on small donations of up to £8000 per tax year • Same rate as Gift Aid tax rate • = top up payment of up to £2000 per tax year • Up to 5 April 2016, donations up to £5000 = top up payment of up to £1250 5 What is it? • Not Gift Aid • Not a repayment of tax • Government spending measure • Complements, doesn’t replace, Gift Aid • Based on tax year, not financial year • Must claim within 2 years from end of tax year Health warning - some specific C of E issues to complicate things! 6
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What will we cover? it Easier... · giving envelopes –providing: • Donation is £20 or less • Nota cheque • Notcovered by a Gift Aid Declaration • Onlydonations -notfundraising,
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Gift Aid Small Donations Scheme
November 2018
What will we cover?
• Details of the scheme
• How to take advantage of the scheme
• How to claim:non Diocesan Scheme parishes
• Questions
2
Gift Aid Small Donations Scheme
• Introduced in Budget 2011
• Small Charitable Donations Act 2012:became law on 19 December 2012
• Took effect from 6 April 2013
• Changes from 6 April 2017
• GASDS or Small DonationsScheme for short
3
The Small Donations Scheme
• Allows charities to apply for a Gift Aid style repayment
• On small cash donations of £20 or lessthendonations of £30 or less from April 2019
• Without the need to obtain Gift Aid Declarations for those donations
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The Small Donations Scheme
• Can claim “top up” payment on small donations of up to £8000 per tax year
• Same rate as Gift Aid tax rate
• = top up payment of up to £2000 per tax year
• Up to 5 April 2016, donations up to £5000 = top up payment of up to £1250
5
What is it?• Not Gift Aid
• Not a repayment of tax
• Government spending measure
• Complements, doesn’t replace, Gift Aid
• Based on tax year, not financial year
• Must claim within 2 years from end of tax year
Health warning - some specific C of E issues to complicate things!
6
2
What is a small donation?• Cash donation from an individual
• £20 or less (£30 from April 2019)
• Coins and notes (any currency!)
• Not cheques, Standing Orders, online giving, text giving
• Since 6 April 2017: contactless donations by debit card/credit card/app(but not chip and pin)
and
• Collected and banked in UK
7
What can we include?
• Loose plate offerings
• Donations given in non Gift Aid regular giving envelopes – providing:
• Donation is £20 or less
• Not a cheque
• Not covered by a Gift Aid Declaration
• Only donations - not fundraising, other income
• No donations with benefits
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Benefits to us – Needs updating
• Potential £244,000 for churches in the Diocese of Liverpool(based on 2014 figures)
• If £8000 limit applied to 2014 figures, potential for £343,000 for Liverpool
• £15 million parishes nationally
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Rules, rules, rules
• Eligibility rules
• The matching principle
to prevent fraud.
• Connected charities
• Community buildings
for fairness.
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Is my church eligible? #1
Claims for donations to 5 April 2017:
• Been registered with HMRC for tax purposes for at least 2 years
• Made a successful Gift Aid claim in 2 of the last 4 tax years
• Without a 2 year gap
• No HMRC penalty in the last 2 years
• Why?Good Gift Aid claiming record assures HMRC that the charity has appropriate internal processes
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Is my church eligible? #2
Claims for donations from 6 April 2017:
• No HMRC penalty in the last 2 years
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3
The matching principle
• Total Gift Aid donations must be at least 10% of potential GASDS, in tax year
• Ie £1 Gift Aid donations for £10 GASDS
• Need £800 Gift Aid donations to claim on full £8000 Small Donations (GASDS)
• Must make Gift Aid claim for donations received in same tax year as Small Donations
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The matching principleFor example:
Income: Gift Aid £600 GASDS £8000
Claim: Gift Aid £150
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GASDS £1500
• Because 10 x £600 = £600025% of £6000 is £1500
• Need £800 Gift Aid for full GASDS
• Or £15.38 Gift Aid per week
Connected charities
• Rules to ensure charities that operate in a similar way, but are structured differently, receive same entitlements
• The limit on which a charity can claim top-up payment may be reduced if a charity is connected with one or more charities
• Rule also to prevent fragmentation
• Connected charities share £8000 allocation
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Community buildings
• Maximum donations limit can be increased for charities running charitable activities in a community building
• To qualify - couple of rules:
• At least 10 people meet in the same building at least 6 times a year
• People must be beneficiaries of charity
• For us, Community building = church
• For us, charitable activity = religiousservices
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Community buildings
• £8000 GASDS allowance for each building
• Buildings must be separate
Buildings can include:
• Church
• Community hall
• School
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Some buildings are excluded
Excludes buildings, or part, used wholly or mainly for residential purposes, or sale or supply of goods.
For example:
• Vicarage
• Residential care home
• Charity shop
• Supermarket
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But, these are single buildings:
• Buildings on same or adjacent land
• Church and church hall
• School with several buildings
• Church with a garden shed
Just one allowance of £8000 GASDS each
Think: Have you any other buildings you can include?
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The Church of England position
Initially
• HMRC judged PCCs to be connectedcharities for the purposes of the scheme
• We all shared £8000 “Top up” allocation
• We could only claim on Community Buildings element of the scheme
What changed?
• HMRC agreed PCCs not connected
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What element do you use?
Are you:
• a single church parish?
Claim on the top up element of the scheme
OR
• a multi church parish?
Claim on the community buildings element of the scheme
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Top up element - what do you claim?
Include small cash (& contactless) donations:
• loose offerings
• regular non gift aid envelopes
• in wall safes
• received outside the building, eg home communions
Up to a maximum of £8000 per tax year
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Buildings element - what do you claim?
• Up to £8000 for each separate church building
• But…What you include depends when donations were received:
• Up to 5 April 2017(tax year 2016/2017)or
• From 6 April 2017(tax year 2017/2018)
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Buildings element – you can claim:to 5 April 2017
Small cash (and contactless) donations
• Collected in the building
• During religious activity
• Only when 10 people present, at least 6 times a year
Include:
• Loose offerings
• Regular non gift aid envelopes
• Other donations in the buildingduring services
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Buildings element – you can’t claim:to 5 April 2017
Donations
• received outside the building
• in wall safes
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Buildings element – you can claim:from 6 April 2017
Include small cash (& contactless) donations
• loose offerings
• regular non gift aid envelopes
• in wall safes
• received outside the building,eg home communions, collected inthe Local Authority Area of thebuilding
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Buildings element – from 6 April 2017
• Donations collected in each building must be allocated to that building
• Donations collected outside the building,can be allocated to any of your eligible buildings in that Local Authority Area:
• Record location donations collected
• To show donations collected withinthe Local Authority
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Can you claim on both elements?
• The complicated answer! Yes, but…
• Have you reached £5000 per church?
• Yes – then claim no more
• No – ask: is the amount worth it?
• Records must clearly show which donations fit with which part of the scheme
• NEVER exceed £5000 per church – or nationally, C of E will lose concession
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Both elements - what can’t you claim?
Donations
• for tea/coffee
• for votive candles
• flower festival
• anything with a “benefit”
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What records do you need?
HMRC require evidence
• Deposit slips of banked cash – in UK
• Should be more than GASDS amount
• Vestry forms showing eligible cash donations
• Date, and evidence of numbers for buildings
• These should not be new!
• May need a little alteration
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Simple vestry sheet example
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St Somewhere's Church Date: ………………………………
Vestry Record Location: ……………………………………….
Attendance 10 or more? Y / N
Potential Gift Aid Small Donations SchemeInclude: loose plate offerings and donations
TOTALNotes £50
£20£10
£5Coins £2
£150p
20p10p5p
2p1p
Total cash
Cheques
TOTAL
Signed ................................ and ................................
Eligible Not eligible
33National church: vestry sheet example
Regular Giving
Envelopes
One-off Gift Aid
Envelopes1
10 or more
attending? 3
No of Envelopes : No of Envelopes : Eligible for
GASDS
Not Eligible for
GASDSNon-Donations
4 TOTAL
Notes: £50
£20
£10
£5
Coins: £2
£1
50p
20p
10p or 5p
2p or 1p
TOTAL
Cheques
GRAND TOTAL
Signed and
St Agatha's Church, Anywhere
Vestry Record
Date: Open Plate and Non-Gift Aided
Donations2
Please complete this sheet in conjunction with the 'Vestry Record Notes' provided.
Your turn!34
On your offering plate:
£50 note
£20 and £10 note in rubber band
2 x £20 note
3 x £10 note
6 x £5 note
12 x £1 coin
5 x 50p
7 x 20p
11 x 10p
14 x 5p
10 x 2p
13 x 1p
Unmarked envelope containing £10 and £5 note
Cheque for £10
Envelope marked "Magazine" with 9 £1 coins
Exercise 1
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Vestry procedure: best practice• Count immediately after service
• 2 people. Both to sign.
• Count loose offerings separately. Analyse cash.
• Separate Gift Aid & non-Gift Aid envelopes (if known)
• Mark envelopes with contents
• If cheque, mark envelope with “cheque”
• Balance total envelope cash with total on envelopes