Parishes in line for windfall under Gift Aid shake-up

24 May 2013

SHUTTERSTOCK

PARISHES in the Church of England could be in line for a windfall of up to £20 million, under a new Gift Aid scheme for small cash donations which came into force last month ( News, 25 March 2011; 21 December 2012).

Under the scheme, churches and other charities can now claim "top-up payments" on up to £5000 of small donations, calculated by dividing the amount donated by four, to a maximum of £1250.

In order to ensure equality between charities such as the Roman Catholic Church, where each diocese is a charity, and the C of E, where each parish is a charity, the limit does not apply to each charity, but to every "community building" that the charity uses.

This means that a parish with three churches, and two church halls located away from the church, could potentially apply to the scheme five times - once for each community building - with a total top-up of £6250 on donations of £25,000.

There is no limit to the number of charities that can claim use of community buildings. A church, a parent-and-toddler group, a Scout troop, and a group for older people who each used the same church hall could all benefit from the scheme, as long as they were run by separate and "unconnected" charities.

Under current rates, the maximum benefit for each community building is £1250 - a total of £20 million when applied across each of the 16,000 C of E churches. The actual figure will vary, because churches with very small congrega-tions will not be eligible; but church-plants that meet in schools, might.

To be eligible for the Gift Aid Small Donations Scheme, a charity needs to have claimed Gift Aid successfully for two years. The amount that a charity can claim is limited to ten times the amount of Gift Aided donations it receives in the same tax year.

John Preston, the C of E's national stewardship and resources officer, welcomed the scheme, describing it as a "huge help to parishes. Whilst the scheme is relatively simple to operate, parishes are strongly urged to check the guidance to ensure they operate the scheme correctly."

For the C of E guidance, visit  www.parishresources.org.uk/giftaid/smalldonations.
For HMRC guidance, visit www.hmrc.gov.uk/charities/gasds.

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