“Roll Up, Roll up! Free Money for your Church!”
A Simple Explanation of Gift Aid
Read on (and print this out for your church) if…
- You’ve never heard of Gift Aid
- You’ve seen Gift Aid envelopes in church, but you’re not sure if you’re eligible to use them.
- You know just one person in your Parish who doesn’t understand Gift Aid.
If you pay income tax, you can increase your contribution by 25% FOR FREE with Gift Aid. Missing this opportunity would be a big shame, but so many of us do miss out because we just don’t know.
Gift Aid is a generous scheme offered by the UK government that was set up to encourage charitable giving. It allows churches to reclaim tax already paid by donors on eligible donations, so it’s well worth taking advantage of!
HERE’S HOW IT WORKS: If you pay income tax, through Gift Aid you can increase every eligible donation to your church by 25% at no extra cost to either you or your church. You just need to fill in a Gift Aid envelope or form from your treasurer, so the church can make the claim from HMRC on your behalf.
So let’s say you pay basic-rate tax. You take £10 from your pocket and generously contribute it to your church’s mission. You’ve already had to pay £2.50 tax on that £10 (you actually earned £12.50 which was taxed at 20% leaving you with £10 after-tax income). So if you Gift Aid your donation of £10, your church can reclaim that £2.50 tax you already paid, and add it to your donation. For every £10 you give to your church, your church actually gets £12.50; £10 from you and £2.50 from the taxman. It’s that simple.
WHAT IF I DON’T PAY TAX? Your church can only reclaim the tax on donations from people who have paid tax in the first place. Some people who are on low incomes or pensions will not be eligible to Gift Aid their donations. But wait! It’s not that your contribution isn’t worth as much. On the contrary; because you never had the tax taken off in the first place, the whole of your contribution makes its way to church. There’s no need for the church to make an extra claim. No-one loses out. Also, as an aside, evidence shows that often, people who have the lowest incomes actually give the most proportionately. In other words, the poorest people are often more generous. Just think of the story of the widow’s mite.
WHAT IF I PAY HIGHER RATE TAX? Only basic rate tax can be reclaimed through Gift Aid, even if the donor is a higher rate taxpayer. However, there are opportunities for higher rate taxpayers to maximise the value of their donation to their church through Gift Aid. Check the Gift Aid website guide for higher rate taxpayers: http://www.parishresources.org.uk/giftaid/
GIFT AID YOUR DONATIONS! It’s free money for your church. Spread the word, tell your friends, ask your vicar, seek out those gift aid envelopes, make sure your standing order is being gift aided. Let’s celebrate this wonderful free money for the mission and ministry and growth of our churches.