Giving to BIOS through Gift Aid

reflecting the March 2000 Budget changes,
replacing Covenants


Declaration Form for completion
What is a Gift Aid?
Gift Aid provides for tax relief on regular or single gifted payments made to UK charities by individuals or companies resident in the UK. For the British Institute of Organ Studies, it is a way of enhancing the income we receive. 

Payment and tax recovery
Your payment can be of any amount, but you may not receive any significant benefits in return. Gift Aid, as previously covenants, can be used in relation to a member's annual subscription, as well as make donations, perhaps to the BIOS Endowment Fund.  Tax paid on any donated payment you make can now be recovered at the basic rateby a registered charity like BIOS:
                        eg. you give to the charity: £10 - by any of the usual means
                                the charity reclaims tax: £ 2.82 (£10 '/. 78 x 100)
                                      total value of your gift: £12.82

Complete a Declaration Form and send it to the Membership Secretary (address)

Alternatively, simply e-mail or ring the Membership Secretary or Treasurer, and confirm that as a UK tax payer you wish to use the Gift Aid arrangements for payments to BIOS.  Written confirmation will be provided, and the arrangement will be in place until cancelled. We will undertake all the paperwork to claim back the tax annually from the Inland Revenue, as with covenants. 

Higher rate - more benefits
Higher rate taxpayers can claim the difference between basic and higher rate tax on their tax return. This situation has not changed.
                        eg. you give: £100; 
                                extra for charity (22%): £28.21; 
                                      extra for you (18%): £23.08

Government adds to giving direct from pay
Now you can give as much as you like direct from your pay, and, for every £10 you give, the Government will contribute £1 more! This offer lasts until 2003 and you will also receive immediate tax relief on your giving of up to 40% 
                eg. you give from your pay: £50
                       Value of your gift to charity (including 10% bonus from Government): £55
                             Actual cost to basic rate taxpayer: £39.00
                                   Actual cost to higher rate taxpayer: £30.00

Give shares and you benefit too
If you decide to give quoted shares to a charity, you’re not only exempt from Capital Gains Tax, but you can also claim relief from Income Tax (up to 40%) on the market value of your shares. 
          eg. you give shares valued at £1,000 (this example is for those paying 40% tax)
                        Capital Gains Tax savings: £400
                                   Income Tax: £400
                                            Maximum tax saving: £800

Companies
Prior to the March 2000 Budget, if not since (?), the minimum donation to qualify for Gift Aid in the case of companies, depended on whether your company is a close company or not. If it is, each gift must be at least £250. If it's not, there is no such restriction. As in the case of individuals, there is no upper limit on donations.

Unless the rules have changed, the company takes off basic rate tax when it makes a payment to BIOS (that is, make a net payment) and gives us a certificate (previously form R240(SD)), so we can claim back the tax from the Inland Revenue. Complete a form CT61(Z), and pay the tax to the Inland Revenue within 14 days of the end of the period covered by the CT61(Z). The gross amount of the payment is allowed as a deduction against company profits, for corporation tax purposes, for the accounting period in which the payment is made.

As with individuals, neither the company nor anyone connected with it must receive any significant benefit in return for the gift.

We shall be pleased to help set up such procedures with you, and/or in obtaining the appropriate forms. Do contact:

The Hon Treasurer
The British Institute of Organ Studies
46 Hallgarth Street, 
Durham DH1 3AT
Tel: 0191-386-2301

The March 2000 Budget changes
"Tax efficient giving made easier"
A number of important changes which make it easier for charitable giving to go further were announced by Gordon Brown in his Budget on the 21 March. The changes extend the former Gift Aid Scheme, which had previously been restricted to one-off donations of at least £250 with the requirement that you filled in a form each time you gave in that way.

From 6 April 2000 the scheme has been transformed by the abolition of any minimum sum. This means that every tax payer (regardless of their tax rate) can use New Gift Aid for all donations, whether large or small, regular or one off, provided they are made in a recordable way - all payments to BIOS are separately recorded.

It will be easy for tax payers to join the New Gift Aid Scheme. All they have to do is either
1)   fill in and send to BIOS a simple Gift Aid Declaration (also available from the Membership Secretary, or Treasurer [addresses]),  or
2) inform the BIOS Membership Secretary or Treasurer in writing, by telephone or electronically of your wish to participate in the Gift Aid scheme, which will be confirmed in writing by BIOS and become effective. No actual signature is needed; a Declaration only has to be made once and will be valid for as long as the donor remains a tax payer or until cancelled. There will be no minimum or maximum period for donations to be made.

The New Gift Aid Scheme will replace the previous method by which regular tax efficient donations were made by Deeds of Covenant. Existing covenants will continue to run until the end of their term, but tax relief will have to be collected by BIOS under the New Gift Aid Scheme. In effect the existing Deed of Covenant is treated as a Gift Aid Declaration. Some BIOS Covenants are open-ended, but with the expiry of a fixed-term deed, subsequent donated payments will need to be covered by a new Gift Aid Declaration to remain tax efficient.

Other measures announced in the Budget are a 10% bonus added by the Government to all donations made through a Payroll Giving Scheme, the extending of tax relief to gifts of shares to charities, and making ticket sales for charitable events exempt from VAT.

However...the basic rate of tax has been reduced to 22% which means that the amount that can be claimed back on charitable giving is now 28p in the £.   The Government claims that these new measures will be worth up to £400m a year in tax relief and that they provide a major opportunity for charities to boost income. Charities, including BIOS, need to consider carefully how they might gain maximum benefit from these important new measures.

Maintenance of BIOS Webpages is undertaken by Richard Hird [www.duresme.org.uk]