February 17, 2020

Gift Aid rules for churches

Gift Aid rules for churches

Gift Aid is a great way to make the most out of your donations without needing your supporters to give any more than they would already. How does it work? Gift Aid increases the value of any cash donation you make by 25% by allowing the organisation you’re donating to reclaim the income tax paid on the gift. As a church, this allows you to max out the impact of each gift from your supporters and raise more money. Doesn’t sound half bad, does it?

Before we jump into the Gift Aid rules for churches, if you landed on this page hoping to find out about the Gift Aid legislation for charities, then jump to our guide on Gift Aid Regulations For Charities. At GoodBox, we like to make sure the advice we offer organisations is unique to them, which is why we’ve created separate guides on Gift Aid for charities, companies, and of course this one for churches. The good news is, Gift Aid rules for churches are very similar to the Gift Aid rules and regulations for charities, with some small differences. Keep reading to find out the essential rules you need to know about claiming Gift Aid as a church.


Church collections

As a church, you’re likely to collect donations from your dedicated support base in the form of traditional church collections. The good news is, church collections are one of the first places you can easily implement Gift Aid to increase the amount of money you receive per donation. However, there are some rules. For one, you cannot claim Gift Aid on donations collected in your church that are for another charity. This is because the money collected is not part of your church’s income, but part of a charity’s. However, any donations collected specifically for your church are eligible, including contactless donations collected using our cashless church plate, the GoodPlate.

Make the most out of your congregation

Churches often have a faithful congregation that are happy to support their church on an ongoing basis. Make the most out of this dedicated support base by ensuring you have valid Gift Aid declaration forms from each of your supporters. That way, you can claim Gift Aid on donations from all of your congregation. Just make sure you have a way of tracing each donation back to the original donor so you know how much you can claim from each supporter. To do this, you’ll need evidence to show who had given donations and how much. Envelopes that have Gift Aid declarations on them are an easy way to do this, just make sure you retain them for later reference!

Fundraising events

Christmas carol services, Easter fairs and tea and coffee mornings are all examples of fundraising events which as a church you can organise as a way to bring in a wave of extra donations. Fundraisers are a great way to generate extra funds and provide an opportunity for your supporters (new and old) to connect with your cause. Plus who doesn’t love an excuse to eat cake? When it comes to Gift Aid, the only way for donations from fundraising events to qualify is if any payments made by the attendees are completely voluntary.

If attendees have to make a donation in order to attend the event, for example to purchase a ticket or slice of Victoria sponge, then the payments are not optional and therefore do not qualify for Gift Aid. This is because the donations are seen as payments being placed in return for something else. However, if you do choose to have compulsory payments, any money donated above the minimum can qualify for Gift Aid.

Do you need expert help in organising your fundraiser? Check out our guide on How To Plan A Fundraising Event.

Sponsored events

From the well-loved family fun runs to the West Coast Giant Pumpkin Regatta, there is no shortage of events that we can participate in and use as an opportunity to raise money for a cause we care about. When it comes to claiming Gift Aid on sponsored events like marathons, fancy dress parties, carnivals and cake sales, the simple answer is you can only claim Gift Aid on any money raised by participants. You can’t claim it on any registration fees, entrance tickets or costs of the event. A simple way around this is to make the participation fee cover the cost of running the event. That way, any money raised in sponsorship is Gift Aidable and will not need to be used to cover the costs of organising, setting up and running the event.

It’s also important to note that you cannot claim Gift Aid on any sponsorship collected from ‘connected persons’ such as relatives of the participant. This is because HMRC sees these donations as relatives paying for a participant to take part in an event, as opposed to a charitable donation.

Raffles, tombolas or competitions

A raffle is a classic way to raise money with the prospect of donors going home with a bottle of fizz or tasty hamper full of goodies. However, raffles, tombolas or any competitions for a prize do not qualify for Gift Aid. This is because donors buy a ticket in return for a chance of winning a highly-sought-after prize. Because of this, it is not a voluntary donation but a purchase in the eyes of HMRC and cannot be claimed back.

Church entry fees

Across the UK and abroad, places of worship such as St. Paul’s and York Minster use church entrance fees as a revenue stream to upkeep the maintenance of their buildings. Because these ‘donations’ are made in return for entrance to a place of worship, they cannot be used for Gift Aid. However, if a visitor to your church makes an additional gift on top of the required entry fee then you can claim Gift Aid on the additional donation. Just so long as the additional donation is 10% or more above the standard admission charge.

Whether you need help integrating Gift Aid into your church or place of worship or are looking for ways to modernise your fundraising, GoodBox can help. We can work with you to optimise how you raise money and bring your fundraising to the next level. At GoodBox, we work tirelessly to help organisations like the Church of England and Abu Bakr Masjid= maximise their fundraising, from embracing the latest technologies like our contactless donation devices to donor behaviour analysis and supporting automated Gift Aid. Get in touch today to find out how we can help your organisation make the most out of every donation.

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