As part of my introduction to the exciting world of Charity Finance, I thought I’d start with Gift Aid!
The Gift Aid scheme applies to donations by individuals who pay UK tax. These Gift Aid donations are regarded as having basic rate tax deducted by the donor so as a Charity we can reclaim basic rate tax from HM Revenue & Customs. This means that for every £10 donation we receive we can claim an extra £2.50 (20%) back from HMRC at no additional cost to the donor.
This is fantastic for us and provides additional funding for important grasslands conservation work. Furthermore, if donors are higher rate tax payers, they can reclaim the difference between the basic rate of tax and their higher rate of tax. The donor can either keep this extra relief themselves or donate it back to charity – either way it’s not going to HMRC which can only be a good thing! If higher rate donors want to reclaim the extra relief themselves, this can be done via a Self Assessment tax return or using form P810 Tax Review – available from your Tax Office.
Currently, every donor wishing to Gift Aid their donation, must sign a Gift Aid Declaration stating that they pay at least as much UK tax (for the tax year that they donate) as the amount we will reclaim on their donation. Managing these declarations obviously causes extra admin work, which, as a small charity, we try very hard to keep to a minimum.
The good news is that in the recent Budget the Government announced its intention to introduce a scheme from April 2013 which will enable charities to claim Gift Aid of up to £5,000 without Gift Aid declarations in respect of donations of up to £20. Although I find it frustrating that this is a year away and they haven’t implemented it this year, it will make the Gift Aid claiming process far easier and I’m all for anything that reduces paperwork! It also means the majority of our donors, who give up to £20, won’t have to fill in a Gift Aid Declaration after next April.
In the meantime, Gift Aid really does make a huge difference to The Grasslands Trust, so please do tick the Gift Aid box & sign the declaration, we really do appreciate it.
Jenny Marsden, Finance Manager