Government funds for our Church?By Allan Whittow
We read The Lee is hard put to keep our church in the financial health necessary for its maintenance. How about some funds from the Tax Man?
Most of us know that contributions using Gift Aid enable the Church to reclaim tax on the amount at the rate of 28%, including the 3% transitional relief the government has promised to allow until 2011. So the Church gets £128 for every £100 given via Gift Aid.
Is there more? Yes, for all higher rate tax payers. Once you have decided how much you wish to give, you can increase that amount by one third without it costing you a penny more, providing you keep an accurate log of your Gift Aid donations and declare them on your Tax Return. Too good to be true? Trust me, I’m an accountant. Or, read on.
Leveraging your giving
A 40% tax payer, declaring a £100 Gift Aid contribution on his Tax Return, will get a £25 tax saving via his next tax coding assessment which will reduce the net cost to £75. So he can increase his giving by 33% from £100 to £133 and the net cost will still be just £100. Furthermore, the new £133 still gets the 28% Gift Aid increase to give the Church £170. That’s 70% extra, free!
Of course nobody is going to stop even 40% taxpayers splashing out on raffles or the tombola at the Church Fête – all the fun and those exciting prizes – but the Church gets just £100 for every £100 spent. That’s why we and our supporters would rather see serious contributions via Gift Aid, using government help to increase every £100 to £128 or even £170 – a bargain few can afford to ignore these days!