Gift Aid FAQs

 

Gift Aid FAQ

 

If you Gift Aid your donation, Wellspring will receive an additional 25p for every pound you give. Wellspring can claim Gift Aid tax relief of 25p on every pound.


How can I sign up for Gift Aid?

All you need to do is complete our Gift Aid declaration form

How does Gift Aid work?

Gift Aid is one of the easiest ways to make your donation tax effective. The charity you are supporting reclaims the basic rate tax from HMRC. There is no extra cost to you and the process is simple - all you have to do is make a Gift Aid declaration.

What does the Gift Aid declaration commit me to?

Absolutely nothing! It just ensures that if you choose to donate to Wellspring, we can claim an extra 25 per cent back from HMRC.

For every £1 you donate to Wellspring in a financial year (from 6 April to 5 April of the following year), you must have paid 25p in income or capital gains tax in the same financial year to qualify for Gift Aid.

What is a Gift Aid declaration?

It is simply a statement by an individual taxpayer that they want a charity to get back from HMRC the tax paid on their donation. This is a great way to add 25 per cent to the value of your gift to Wellspring without it costing you a penny more!

Gift Aid - do I qualify?

For every £1 you donate to Wellspring in a financial year (from 6 April to 5 April of the following year), you must have paid 25p in income or capital gains tax in the same financial year to qualify for Gift Aid.

How do I know if I pay UK income or capital gains tax?

You pay these taxes if:

  • income tax is taken from your wages or salary before you receive your pay
  • you pay tax after filling in a self-assessment form each year
  • you have any taxable savings (in a Building Society, for instance), or a pension plan, or investment income
  • you have paid any capital gains tax, on the sale of a property or some shares, for instance.

If any of these applies to you, please complete and return your declaration so Wellspring can reclaim the tax on your donations. NB Inheritance tax does not count as UK income or capital gains tax.

Why does it work out at 25 pence for every pound given?

Although basic rate tax is currently 20 per cent, the donation for £1 is treated as the net after tax from £1.25 (£1.25 minus 20 per cent is approximately £1). Wellspring get back the 25 pence.

What if I don't pay UK tax?

Then, unfortunately, you are not able to make a Gift Aid declaration.

How do I make donations by Gift Aid?

Once your gift aid declaration has been logged with the AOG, you will be given a three digit reference number.  If you tithe by cash, then put the cash in an envelope and either put your name or this reference on the envelope so that it can be identified who the tithe is from.  If you pay by cheque, as long as your name is printed on the cheque, there is no need to put it in an envelope.  You can also set up a standing order directly into the Church bank account, if you want to do this, please ask for a form.

What if I want to give anonymously?

Unfortunately, Wellspring would need to record each donation that you give by gift aid so that the tax can be claimed back from the HMRC, so it is not possible to gift aid anonymously directly to the church.

However, if you set up an account with the Charities Aid Foundation (CAF), you can get a ‘cheque book’ which you can request to be anonymous and give your offering through these ‘cheques’.  The CAF claims gift aid for all of the money you place in the account and you can choose which charities to give money to.

What if I'm a pensioner?

You may still pay tax on a private pension plan or a savings account, or pay capital gains tax if you sell property or shares. If so, please tick the Gift Aid declaration.

What if I'm a higher rate taxpayer?

Wellspring can only directly claim back at the basic rate but please complete and return the declaration anyway.

However, as a higher rate taxpayer, if you declare your donations on your tax return, you can claim a rebate based on the difference between the higher rate and the basic rate when you fill in your self-assessment form.

For example, if a higher rate taxpayer makes donations totaling £100 over a year, on top of the £25 that Wellspring claims back directly, you can reclaim as much as £25 from the taxman.

What if I'm a lower rate taxpayer?

If you pay a lower rate (10 per cent or 20 per cent), Wellspring can still claim back 25p for each £1 you donate, provided you pay enough tax to cover the claim in the tax year you make the gift(s).

What if I make my donations via CAF (Charities Aid Foundation)?

If you normally make donations via CAF, tax has already been reclaimed. However, please fill in the declaration anyway so that any separate donations you might make are tax effective as well.

Can Gift Aid be applied to events sponsorship?

Yes, in most cases - please see sponsorship forms for more details. If you are being sponsored or sponsoring someone else, for example someone taking part in an Wellspring abseil or running the London Marathon, please Gift Aid eligible contributions. Remember each sponsor needs to include their home address and postcode to enable Wellspring to reclaim the tax.

How long does the declaration last for?

To simplify matters for both you and Wellspring, the declaration wording normally covers present, future and past donations. We can back-claim four years and we will continue to claim until you tell us otherwise, so long as you are eligible.

Who will have access to this information about me?

Only Wellspring and HMRC. We will not share it with anyone else.

What should I do if my tax status changes or I want to cancel my declaration?

Please let us know.

What if I don’t pay much tax?

If you are concerned that your offerings over the year will exceed the amount of tax that you pay, please let Wellspring know.  We will then keep a record of your tithes over the tax year, but not claim for them until you have received notification at the end of the tax year as to how much tax you have paid.  We will then send off the gift aid claim, ensuring that the claim does not exceed the amount of tax you pay.  Please remember, to also make a note of any other charities for which you may have signed a declaration.


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