Other tax effective issues:

The Gift Aid Secretary and the Annual Accounts / Claim back period / Repayment interest / Company giving.

See here for the Gift Aid Secretary and the Annual Accounts, and below for 6 year claim back period, Repayment interest and Company giving.

The Gift Aid Secretary and the Annual Accounts

The Charities' Act legislation that came into force for the 1997 annual Church Accounts requires all Parochial Church Councils to include within their accounts various details. The Church Treasurer will require the Gift Aid Secretary to provide him/her with specific details in order that the accounts comply.

All PCC accounts are for the calendar year (year ending 31st December), and hence the Gift Aid Secretary will need to be able to supply the relevant information for that period (even though most Gift Aid Secretary’s work is geared to the tax year!).

The Treasurer will need to liaise with the Gift Aid Secretary as to what information is required, and by what date, but the information required is likely to include:

For the year ended 31st December:

• Total Gift Aid donations
• Estimated amount of Income Tax Reclaim due, which has not yet been claimed (analysed by tax year)
• Amount of Income Tax Reclaim due, which has been claimed but not yet received (analysed by tax year)
• Estimated amount of Income Tax Reclaim due if a claim had been submitted on 31st December.

This information will need to be supplied for each category of fund - i.e. general funds and for each specific (restricted) fund.

6 year claim back period

There is a time limit for claiming Gift Aid of 6 years. Since the new Gift Aid system began on 6th April 2000, we have been able to backdate Declarations and claims to that date. Since 6 years has now passed, we need to be aware of the time limit available for both claims and Declarations.

A PCC is a "company" for tax purposes. A charity which is a Company for tax purposes must make any claim within 6 years from the end of the accounting period to which the claim relates. The church’s accounting period ends on 31st December.

So for tax year 2000/2001:

• Donations received between 6th April 2000 and 31st December 2000 must be claimed by 31st December 2006.
• Donations received between 1st January 2001 and 5th April 2001must be claimed by 31st December 2007.

These dates can be "rolled on" for each tax year. Donations received in 2000 cannot now be claimed. Gift Aid secretaries need to be aware of this, and need to approach any possible tax payers in their congregations, who have recorded giving from the prior 6 years, as soon as possible.

Repayment interest

Repayment interest will be paid by HMRC Charities on claims which are not made in a certain time period. Repayment interest is now due on claims from the day after the end of the accounting period (31st December) to which the claim relates. From 1st July 1999, HMRC Charities had been under-calculating the repayment interest due. They then reviewed interest which was due for claims made from this date, and issued cheques where relevant.

Company giving

From 1st April 2000 the rules applying to companies who donate to charity changed. The church cannot reclaim tax on any donations received from a company on or after 1st April 2000. (Note 1st April, not 6th). This applied even where a Deed of Covenant was in effect after 1st April. A company will pay you the full donation including the tax and claim tax relief when calculating their profits for corporation tax. If a company incorrectly deducts tax from its donation, you should tell the company about the rule and ask it to pay you the sum it has incorrectly deducted.