Gift Aid – Reduction in the basic rate of tax

(effective from 6 April 2008)

• Parishes within the Diocese face a potential loss of tax amounting to £50,000
• To prevent this loss can I increase the amount of my donation by 15p in every pound?
• If I’m not already using Gift Aid can I now complete a Declaration to help my parish claim as much tax as possible?

If you make donations to your parish using the Gift Aid Scheme, those payments are treated as being made net of basic rate tax.

The basic rate of tax will be reduced to 20%, from its present rate of 22%, on 6 April 2008.

Unless you review the amount that you donate to your parish, it is likely that the amount of tax repayment, obtained by the Diocese on those donations, will be reduced significantly.

Set out below are two examples highlighting the possible impact on parishes’ income caused by the reduction in the basic rate of income tax:

Example 1: This shows the effect on the amount of tax repayment, claimed on your donations by the Diocesan Gift Aid Office, if you decide not to increase the amount that you give to your parish in the offertory plate.

Result: The amount of tax repayment would be reduced by approximately 11.5%.

Example 2: This shows how much you would need to increase your offertory plate donation, on or after 6 April 2008, simply to ensure that the Diocesan Gift Aid Office obtains an identical amount of tax repayment from HM Revenue & Customs.

Result: The amount of donations made to your parish in the offertory plate would need to be increased by approximately 13%. Alternatively, you may wish to increase your offertory donation by 15p in every pound – eg instead of £1.00 try to give £1.15.

Gift Aid – What Can I Do?

If you already give generously to your parish using the Gift Aid Scheme – thank you!

Please do try, however, to review the amount that you donate to your parish.

Alternatively, if you are a taxpayer and make donations to your parish, without being a Gift Aid donor, please think seriously about completing a Gift Aid Declaration.

That declaration is a simple document to complete – you merely have to make a note of your full name and home address. You don’t have to do anything else. Any donations you make can then be increased, at no extra cost to yourself, by the claiming of a tax repayment from the tax authorities by the Diocesan Gift Aid Office.

Simply ask yourself – am I a taxpayer?

If you are, you merely have to pay enough tax (whatever your rate(s) of tax may be) on your personal income and/or gains to cover the amount of tax repayment claimed on your donations in the particular tax year. It is that simple!!!!

So, why are you delaying? There’s nothing to be afraid of!

Ask your Parish Priest to provide you with a Gift Aid Declaration.

If you still have any queries regarding Gift Aid, please do not hesitate to contact the Diocesan Gift Aid Officer at the Curial Office. His telephone number is (01642) 850505 ext 234.

Alternatively, his email address is: giftaid.legacy@dioceseofmiddlesbrough.co.uk

Martin Russell

Gift Aid & Legacy Promotions Officer