Gift Aid

Gift Aid Schemes and CIOs

The Chair and Trustees of the Diocesan Board of Finance [‘the Board’] appreciate that LMAs and Churches may be experiencing difficulties in claiming Gift Aid and in registering as Charitable Incorporated Organisations. The following seeks to assist you, particularly Treasurers, in these matters regarding donations and CIOs:

There are three ways in which Local Ministry Areas (LMAs) and churches can process donations:

1. Gift Aid.
2. GASDS (Gift Aid Small Donations Scheme).
3. Gift Direct.

Gift Aid is a scheme which allows charities to reclaim tax on donations made by eligible UK taxpayers. Essentially, for every £10 donated, churches can claim an extra £2.50 from Government (HMRC), thereby boosting the donation’s value by 25%. This is significant for churches allowing them to make a greater impact with the same amount of money. To achieve this the donor must be a taxpayer (Income Tax or Capital Gains Tax) and have signed a Gift Aid Declaration. The Church/LMA may then claim back the tax on their donation(s). This includes one-off donations and regular giving. There must be proper records and audit trails.

The Board recommends all LMAs and churches ensure they

(i) operate an effective Gift Aid Scheme and

(ii) ensure their claims are up to date . Claims can be backdated for up to four years.

Being up to date is particularly relevant where an LMA is about to register as a Charitable Incorporated Organisation (CIO) - see below.

GASDS (Gift Aid Small Donations Scheme) – for donations up to £30 each. Suitable for e.g. loose plate collections, cash and contactless donations only. This scheme is not linked to the amount of tax a donor has paid.

Gift Direct – This is for regular giving by Direct Debit and is administered by the Representative Body [‘RB’] of the Church in Wales . The donation goes to the church to which it’s donated and the RB claims the Gift Aid then pays this directly to the church. The donor may amend or cancel their direct debit at any time . The benefit to the Church is less administration as the Gift Aid is claimed regularly by the RB. Full details & forms are available on the Church in Wales website.

The Board asks that all LMAs check their records and, with their constituent churches, confirm which are, and which are not, up to date with their Gift Aid claims. For those which are not up to date it would be helpful for the Board to know how they intend to proceed to ensure they are to be brought up to date. LMA Councils are asked to confirm their position on this to clarewalker@churchinwales.org.uk

Registration as a CIO

Following CIO registration, the new CIO needs to register for Gift Aid and new declarations and weekly giving envelopes will be required. Claims for constituent churches will be submitted by the LMA and the recovered Gift Aid returned to the individual churches.

LMAs should appoint a Gift Aid Secretary, i.e. someone who will be processing the claims. These will need to make themselves aware of the rules and procedures for claiming and the Board is happy to share training materials and guidance to these people if it knows who they are.

To assist with this please provide their name and email address to Clare Walker at clarewalker@churchinwales.org.uk

The RB has Guidance Notes on CIOs on its website.

Download [PDF]

Pages 50/51 of this outline the tasks to be undertaken after CIO registration.