Ringing and Money
3. Is this a Gift I See?
One of a series of articles on Ringing and Money by Steve Coleman
I hate raffles but still feel compelled to buy tickets. Since I never claim a prize if I win, can I Gift Aid my ticket money? Can I also Gift Aid the bottles of wine I’m pressured into giving as prizes?
Jolly good questions. And splendidly, I’ve been besieged by all sorts of other Gift Aid questions too. And not just simple questions either, but complex and convoluted ones full of verve and inspiration, and designed to gain the maximum mileage from the system while at the same time remaining honestly within it.
Tower Visiting Fees
But honestly is the hard part. It’s easy to think of dishonest schemes, and ones that would probably work too. They’d get you the money alright and you probably wouldn’t get caught either, but that’s not what we’re into here. We’re only concerned with what’s legal and proper.
So first, what if your church actually charges people to ring there? What if it says, "Our charges are £10 for an outing and £1.50 per rope for a quarter peal."? Are these charges Gift Aidable?
Quite simply, no. Your visitors will not be making an entirely voluntary donation and your church should not be reclaiming tax. It’s no use your visitors saying they were going to donate that amount anyway. They’ve been charged and that’s that.
Of course, if your church says, "We would be grateful for a donation of at least £X," or even, "We expect a donation of at least £X," those payments can still be made under Gift Aid.
Rather more oddly, if you pay the charge plus 10% – i.e. £11 instead of a £10 charge – the entire amount is Gift Aidable as long as the church makes absolutely clear that the extra £1 is entirely voluntary.
The Paying Agent
Also on the honesty front, I’ve been asked about shared donations. If there are ten of you paying £1 each, can one person collect up all the contributions and hand over one Gift Aid declaration for the entire £10?
Once again, no, because £9 of the £10 would not be an entirely voluntary donation by the payer. He or she does not have the option of collecting up the £1s and then keeping them for himself. What you can do, though, is arrange for an entire tower donation to be paid by each band member in turn on a rota basis. That is OK for Gift Aid.
Another correspondent asks how he should value for Gift Aid the second-hand bell he’s giving to a rehang.
Two answers here. First, Gift Aid only applies to payments of money. That includes cash, cheques, debit cards, foreign currency, etc, etc but not goods of any kind. So if you simply give a bell – or any other item such as a bottle of wine as a raffle prize – Gift Aid doesn’t come into it.
You can, though, sell the bell to the church and then give the money back under Gift Aid – and you can do the same with the bottle of wine. But do make absolutely sure that you do this by way of two separate cheques. Don’t try to short circuit the paperwork. The bellhangers doing the rehang, or your Association belfry adviser, will provide a good enough valuation of the bell.
And in case you’re wondering why some ways of rearranging things are OK for Gift Aid while others most definitely aren’t, the answer is simple. A payment is Gift Aidable if, at the moment you give it, it is entirely voluntary – i.e. you could walk away with the money instead and no one would have the slightest claim on you to do otherwise.
In fact, HM Revenue and Customs openly encourage people to rearrange things to get the maximum benefit from Gift Aid and you’ll find lots of very helpful suggestions on their website.
But what if you get something in return for making a donation? What if you give money to a charity and they give you something back? Well, this is all a bit of a minefield, but essentially the legislation is designed to stop many of the schemes people have been suggesting to me. The typical suggestion has been that people give £20 under Gift Aid and then get a free gift of a crate of specially labelled beer in return.
All these schemes are definitely not on. Any benefit you receive following a donation – whether or not expected or wanted – must be worth no more to the recipient than 25% of the gift, and no more than £25 on an annualised basis. This completely rules out the free beer and similar schemes. It also rules out schemes wherein the cost of providing the benefit is much less than the value to the recipient.
It does not, though, rule out a free, inscribed ballpoint pen, a thank you card, a plaque in the church, a plaque on the frame or an inscription on a bell. Equally, it doesn’t rule out a front seat at the rededication, an introduction to the Mayor and a free go at the finger buffet.
So how come Association subscriptions don’t get caught? How come if your Ringing Association is a charity you can get all the benefits of membership but still Gift Aid your subscription?
Well, annual subscriptions have their own rules, and the Annual Report, block insurance for members, periodic news-letters and attendance at Association events are excluded from being counted as benefits. The warm and comfortable feeling you get from being a member doesn’t count either, and since ringing Association members get nothing else, that’s that. Indeed, ringing Associations are far more "genuinely charitable" – in the non-technical sense – than many other charities anyway.
Taking part in a raffle, though, is a benefit, and the technical value of that benefit is the exact amount you pay for your ticket. And that’s so notwithstanding that you decide in advance that all the prizes are rubbish and that you’ll keep completely silent if your ticket comes up. To you, your payment may be an absolute donation, but in law it simply isn’t. Sorry!
Of course, you can always offer to give money and not buy a ticket – but braving the hurt expressions of the organisers isn’t easy.
Association Peal Fees
But the question that really intrigued me related to Association Peal Fees – i.e. the 25p or 40p per peal per person paid by peal ringers to their Association. "Are these Gift Aidable if the Association is a charity?" asks J. S. of Suffolk.
Well, I can’t give an absolute answer on this because it might depend on the particular rules of your particular Asso-ciation, but the general position is this.
Peal fees are called fees because in the old days they paid for the services of a calligrapher to write up the peal in the Peal Book. They also paid for the appropriate share of the Peal Book itself – which being of very high quality, didn’t come cheap.
But these days things are different. As far as I’m aware, no Association pays for a calligrapher any longer, but even if yours does – or even if it still buys blank peal books made of genuine goatskin – I really don’t think this can possibly be regarded as a "benefit" to the peal ringer within the meaning of the Gift Aid legislation.
Of course, Revenue and Customs might take a different view, but since my own Association gave up recording peals in books forty years ago, I phoned up a Revenue and Customs Gift Aid expert and discussed our particular position with her.
Not surprisingly, she was unhappy with the word, fee, and she suggested we didn’t use it when making our Returns, but as regards the reality of the arrangements, she was content that our peal fees are indeed Gift Aidable. Our peal fee is calculated to cover the cost of the appropriate part of the Annual Report, but since the Annual Report does not constitute a Gift Aid benefit, that can be disregarded. And since under our Rules the only other benefit is the warm and comfortable feeling of contributing to our publicised success, that can be disregarded too.
Of course, whether it’s worth the hassle of recovering the tax would depend on how your own record keeping is set up, but I’m pleased to say that in our own case – due to the supreme efficiency of my colleagues, the Treasurer and Peal Secretary – it definitely is.
Which all goes to show how we can all benefit from each other’s ideas and questions. Next time we’re looking at Tower Funds.