DIOCESE OF SHEFFIELD CHURCH FINANCE UPDATE 30 September 2013 © Association of Church Accountants & Treasurers

CONTENTS An update on topical issues for the following: Gift Aid Employment VAT

GIFT AID DECLARATIONS HMRC have requested that the new format should be used for new declarations from 1 January 2013 Existing declarations will remain valid However, HMRC has indicated that existing stationery can be used

ENDURING DECLARATION Please treat as Gift Aid donations all qualifying gifts of money made from the date of this declaration and in the past four years. I confirm I have paid or will pay an amount of Income Tax and/or Capital GainsTax for the current tax year (6 April to 5 April) that is at least equal to the amount of tax that all the charities and Community Amateur Sports Clubs (CASCs) that I donate to will reclaim on my gifts for the current tax year. I understand that other taxes such as VAT and Council Tax do not qualify. I understand the charity will reclaim 25p of tax on every £1 that I have given.

SINGLE DECLARATION Please treat the enclosed gift of £…………… as a Gift Aid donation. I confirm I have paid or will pay an amount of Income Tax and/or Capital GainsTax for the current tax year (6 April to 5 April) that is at least equal to the amount of tax that all the charities and Community Amateur Sports Clubs (CASCs) that I donate to will reclaim on my gifts for the current tax year. I understand that other taxes such as VAT and Council Tax do not qualify. I understand the charity will reclaim 25p of tax on every £1 that I have given.

6 CHARITIES ON-LINE Effective from 22 April 2013 Current R68(i) print-and-post repayment form are being replaced There are 3 options: claim on-line; claim using external software (e.g. Data Developments); or claim using a paper form HMRC will accept R68(i) forms until 30 September 2013

7 CHARITIES ON-LINE (cont) Whichever option is adopted, the following minimum information will be required for each Gift Aid donor: title (optional) first name or initial surname house name/number post code date of payment (or latest in a series) total donations during the period covered by the claim

8 CHARITIES ON-LINE (cont) For on-line claims there is a facility to paste information from spreadsheets into the HMRC form. HMRC schedule is written in OpenDocument format (ODF).This may require up-to-date versions of Microsoft Office etc. For sponsored events, all the donations for someone participating in a sponsored event can be aggregated as one entry under the name of the participant. Individual donations of £500 or more will need to be shown as separate lines. (Aggregation did not apply to R 68(i) claims)

9 CHARITIES ON-LINE (cont) With effect from 6 April 2013 donations of £20 and under can be aggregated up to a total of £1,000. Previous thresholds were £10 and £500 respectively. The old thresholds apply to claims submitted on R68i returns

10 CHARITIES ON-LINE (cont) PAPER FORM OPTION A new form ChR1 has been introduced Will need to be completed by hand, with each letter or number in an individual box. Will not be able to use photocopies of the new form Forms are available by order from HMRC

GIFT AID SMALL DONATIONS SCHEME (GASDS) Applies to small cash donations received on or after 6 April 2013 Scheme is based on tax years (to 5 April) not calendar or accounting years Potential for churches to claim gift aid on small cash donations (max £20 per donation) up to £5,000 pa, PER community building, WITHOUT any evidence that the donors are taxpayers (see later slide) Cheques are not included within the scheme

12 GIFT AID SMALL DONATIONS SCHEME (GASDS) Maximum claim in any one year is equivalent to ten times the value of donations under regular Gift Aid The charity must have made a successful Gift Aid claim in 2 of the previous 4 years. Arrangements are in place where charities merge. The small donations claims must be submitted within two years of the end of the tax year in which the donations were received

13 GIFT AID SMALL DONATIONS SCHEME (GASDS) Non gift-aided donations received through an envelope scheme will qualify for the scheme It is essential that conventional Gift Aid continues to be maximised

14 GIFT AID SMALL DONATIONS SCHEME (GASDS) Community Buildings Each church can claim on up to £5,000 received as small donations in each of its “community” buildings. Each building must be used for charitable activities at least six times a year, with at least ten people attending. Church plants (meetings in schools, village halls etc) can qualify as separate “community” buildings. However, a residential home does not qualify as a community building. Two buildings on adjoining land are treated as a single building for this purpose.

15 EMPLOYMENT A church must register as an employer with HMRC and operate a PAYE scheme if any of the following apply: they pay an employee at or above the PAYE or NI Lower Earnings Limit (currently £182 and £109 per week respectively) they employ anyone who has another job, they employ anyone who is receiving a state, company or occupational pension they provide an employee with employee benefits Once registered, all payments to all employees must be reported to HMRC through their PAYE system using Real Time Information (RTI)

16 VALUE ADDED TAX FOR ALL CHURCHES (including church halls) Construction work for disabled access / facilities is ZERO rated 5% VAT on utilities (gas, electricity etc). Also no climate change levy Advertising is ZERO rated

17 VALUE ADDED TAX LISTED PLACES OF WORSHIP GRANT SCHEME (LPW Grant Scheme) VAT paid to the contractor – refund claimed under the scheme From 1 October 2012 scheme extended to cover approved alterations. An extra £30m a year allocated to the scheme during this Parliament For any grant application, total value of invoices must exceed £1,000 (excluding VAT)

18 VALUE ADDED TAX LISTED PLACES OF WORSHIP GRANT SCHEME (continued) Supporting invoices cannot be more than one year old Scheme relates principally to the FABRIC of the building (walls, roof, floor, doors, windows) Scheme has returned from quarterly to monthly payments from 1 October 2012 Projected that applicants will receive 100% of their claim (did not apply during yr to )

19 VALUE ADDED TAX LISTED PLACES OF WORSHIP GRANT SCHEME (continued) The following restrictions have been lifted for work undertaken from 1 October 2012: Plumbing and electrical works Works to kitchens, toilets, floor coverings and handrails. (Floor coverings must be part of the fabric of the building, e.g. excludes carpets) Decoration works Pews Asbestos removal

20 VALUE ADDED TAX LISTED PLACES OF WORSHIP GRANT SCHEME (continued) From 1 October 2012, scheme extended for security and forensic systems to prevent crime Full details of the scheme are available on the web-site: