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Taxman may want Gift Aid envelopes

LEAVING Gift Aid envelopes at the back of churches for additional churchgoers at Christmas to fill in and return on the collection plate could end up costing the churches money, a charity has warned.

One parish treasurer explained this week how, at Christmas and other special festivals, occasional members of the congregation could pick up and fill in Gift Aid envelopes without having filled in a separate annual certificate, so that the church could reclaim the tax.

Lionheart, the benevolent fund for members of the Royal Institute of Chartered Surveyors, warned treasurers to keep those envelopes as evidence. Otherwise, the church might have to repay the tax rebate plus interest when the taxman asks for evidence to support the claim for a Gift Aid rebate.

Lionheart alerted other charities to the problem after it was asked to find 200 certificates out of a total of 20,000 it had collected since the Gift Aid scheme began five years ago.

"We knew we had to be able to retrieve instantly any individual Gift Aid certificate we had ever received," Lionheart's head of finance, Roger Chester, said.

"This could be extremely problematic for many charities, particularly those that request Gift Aid declarations on donation envelopes, such as door-to-door and church collections," he said.

If Lionheart had not been able to trace its Gift Aid forms, the Inland Revenue could demand the full value of the unverified tax relief, plus interest, he said. "This is a very considerable sum, given that claims could go back to the day the Government launched the scheme in April 2000."

Clive Dunkey, managing director of Quantor Scanning, a company that scans the forms for easy retrieval, said tax officials would ask a charity to produce a sample number of the certificates.

If the Inland Revenue asked for 200 forms and only 100 could be found, it would reckon 50 per cent of claims to be non-certificated, and use that proportion to formulate a reclaim, he said. "If there were no certificates at all, then it could claw it all back."

One parish treasurer in Oxfordshire said that he kept the envelopes of "occasional" givers who had not signed an annual certificate. "But I cannot say, hand on heart, that I have them all. I had better keep an eye on things if they are tightening up on this." He did not know what happened to the envelopes of regular givers, he said.

An Inland Revenue spokesman said that he did not think there was a need to keep envelopes where parishioners had already signed an annual Gift Aid certificate.

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