Fletcher Greenwood & Co, Chartered Accountants, Registered Auditors
11 Broad Street, Bradford, BD1 4QT - Tel 01274 729178 - Fax 01274 725470 - Email
The Firm, Services, Briefings, Budget Summaries, Tax Tools, Useful Links

Getting Britain Giving (April 2000)

• From April 2000 the government made a number of important changes to make tax efficient giving easier. The changes extended the existing Gift Aid Scheme to such an extent that it almost became a totally new scheme.
• From 6th April 2000 there is no longer a minimum sum that can be given. This means that every taxpayer can use Gift Aid for all donations, large or small, regular or one off. The only proviso is that the gifts must be made in a recordable way, such as by planned giving envelope, bankers order or cheque. It does not apply to loose plate collections. Many charities have incorporated the Gift Aid declaration onto their collection envelopes.
• In order to join a Gift Aid Scheme all that is necessary is to complete a simple Gift Aid declaration. The declaration merely states that the donation is to be treated as a Gift Aid donation. Technically no signature is necessary although most charities will request one if possible. Depending on the wording of the declaration all future donations will be treated as Gift Aid donations. There is no minimum or maximum period over which donations must be given and no requirement to state the amount of any donation in advance.
• The Gift Aid declaration can be given in advance, at the same time or in arrear of the gift. The declaration can be given at any time within normal tax limits i.e. within the five years following the tax year in which the gift is made. For donors unaware of their tax position giving the declaration can therefore be delayed until their status as a taxpayer is known.
• The benefit to the Charity of Gift Aid donations is that the government will add 28 pence to each £1 given. If all gifts qualified for this subsidy the charity sector would benefit considerably compared with the old system. High rate taxpayers will continue to receive the higher rate relief as previously.
• The new scheme replaces the old Deed of Covenant scheme. Existing covenants can continue to run to the end of their term but will then need to be replaced by a Gift Aid declaration. It normally makes sense to transfer to the new scheme as soon as possible.
• To make gifts under the new scheme donors must pay income tax or capital gains tax. The requirement is that the tax paid must be at least equal to the tax repayable to the charity. Non-UK residents can now make donations out of income charged to UK tax.
• Other new measures are a 10% bonus added by the Government for all donations made through a Payroll Giving Scheme, the extension of tax relief to gifts of shares to charities and making ticket sales for charitable events free of VAT. 
• Donors liable to Capital Gains Tax may wish to consider the combined effect of saving both Capital Gains Tax and receiving Income Tax relief in respect of the same gift. This can result in effective tax relief of 80% on the value of any gift that has zero base cost.

All items © 1996-2006 Fletcher Greenwood & Co.  Site last updated 07/11/2006 12:38
Registered to carry on audit work by the Institute of Chartered Accountants in England and Wales