The Gift Aid scheme is for giving money, on which you've already paid tax, to a
charity. When you choose to gift aid your donation, the charity can reclaim some
or all of the tax you have paid on that money whether it be through earnings, savings
interest, state pension, investments, rental income or capital gains. If you are
a high earner and pay tax at the higher rate, you could also benefit from tax relief.
The Brentwood Diocesan Trust is a registered charity (no. 234092) in England & Wales.
As such, the diocese is able to reclaim from HM Revenue & Customs (HMRC), any basic
rate tax you have already paid on money you donate to the diocese, your parish,
or any organisation represented by the trust.
Basic rate tax is currently 20% so if you give £10 using Gift Aid, its worth £12.50
to the charity. For donations between 6 April 2008 and 5 April 2011 a separate government
supplement of 3p on every pound is added.
Key facts about the Gift Aid scheme
- You need to make a Gift Aid Declaration. A simple form requiring
only your name and address. It can cover every gift to your parish, plus other gifts
which you may wish to restrict to other charitable causes supported by the diocese.
- You must have paid tax at least equal to the amount that will
be reclaimed from HMRC.
- You do not have to be working. Apart from tax paid on earnings,
it could include savings interest, State Pension, investment or rental income or
Capital Gains Tax.
- An easy check to find if you have paid enough tax, in the tax year the donation is made. Divide your
donation by 4. For example, if you give £100 you will need to have paid £25 tax.
(£100 / 4 = £25).
- If you are a higher rate taxpayer, you can claim the difference
between the higher rate of tax (40%) and the basic rate (20%) on the gross value
of your donation. For example, if you donate £100 and the charity reclaims tax of
£25 the total value of your donation is £125. You can claim back 20% of this i.e.
£25 for yourself. The claim can be made on your annual Self Assessment tax return
or a call to your tax office. If you wish to give the £100 together with the tax benefit, e.g. donate £125 less the tax refund you receive of £25 equals net £100, then your donation increases to £160.26 inclusive of transitional relief.
- Effect on age-related Personal Allowance, age-related Married Couple’s
Allowance or tax credit claims. If you claim any of these, let HMRC know
about your Gift Aid donations. This may have the effect of increasing these allowances
or credits if your income was above the Relevant ‘income limit’ that applies.
- You can request to backdate Gift Aid donations as being paid in the previous tax
year if you paid enough tax that year to cover both years’ Gift Aid payments.
Contact the Diocesan Gift Aid Office (Tel. 01277 265282) for further information that you may require.