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GIFT AID Q&A

If you pay tax, Gift Aid is a scheme by which you can give a sum of money to Westie Rescue and we, the charity can reclaim from the Inland Revenue basic rate tax on your gift. That increases the value of the gift you make to us. For example, if you give £10 using Gift Aid in the tax year 2008/09, that gift is worth £12.50 to us. Subject to a few rules, you can give any amount, large or small, regular or one-off, and we can reclaim the tax. If you are a higher rate taxpayer, you can claim relief on the difference between the basic rate and higher rate of tax. If you do not pay tax, you should not use Gift Aid.

How does my gift qualify for Gift Aid?

You must:

• Pay at least as much tax as the charities will reclaim on your gifts in the tax year in which you make them (tax credits on dividend income will count towards the tax paid). The tax year runs from 6 April in one year to 5 April in the next.
• Make a declaration to the Westie Rescue Scheme that you want your gift to be treated as a Gift Aid donation (see Gift Aid Form below).

Have I paid sufficient tax?

When you give money to the Westie Rescue Scheme under Gift Aid we will reclaim basic rate tax on that money. You must therefore pay an amount of tax in that tax year at least equal to the tax we will reclaim. That tax can be income tax or capital gains tax at any rate.

You can calculate the amount of tax we recover by simply multiplying the amount of your gift by

With the basic rate at 20%, we reclaim 20/80ths of your gift.

Example:

During the tax year you give a total of £400 to Westie Rescue. Under Gift Aid, the Inland Revenue treat this sum as a gift made net of basic rate tax (i.e. after tax has been taken off at the basic rate). With the basic rate at 20%, we reclaim £100.00 (£400 x 20/80) and your gross gift is worth £500.00 (£400 + £100.00) to Westie Rescue!

If you have paid less tax than £100.00, you should not make the donation under Gift Aid. You should simply give the money to us and not sign the Gift Aid declaration. If you do sign the declaration, so that the charity recovers tax on the donation, you may have to pay any excess to the Inland Revenue.

If you are a basic rate (20%) taxpayer and you have paid tax (income or capital gains) at least equal to the £100.00 claimed by us, there is nothing further for you to pay.

What if I am a higher rate taxpayer?

The Westie Rescue Scheme reclaims tax on your gift only at the basic rate, even if you are a higher rate payer. If you are a higher rate taxpayer, we can claim the difference (20% in 2008/09) between the higher rate of tax of 40% and the basic rate of tax of 20% in your Self Assessment return.

So, in the example above, we may reclaim higher rate relief of £100.00 (£500.00 @ 20%) on your gross donation of £500.00.

Can I count tax paid on my dividend income?

Yes. Tax credits on dividend income can be used to cover tax reclaimed by us.

What about tax deducted from my savings?

If tax is deducted from bank or building society interest you receive, you can use that to cover the tax on the gift, provided you have not reclaimed it. If you have reclaimed that tax, then you must not use it to cover the tax on your gift.

Why do I need to give a declaration?

The declaration is our authority to reclaim tax from the Inland Revenue on your gift. By giving the declaration, you are confirming that you understand this.

How do I make a declaration?

By simply filling in this form:

Can I withdraw a declaration?

If, for any reason, you decide that your gift should not be within Gift Aid - perhaps you realise that you will not pay enough tax to cover the tax reclaimed by us - then you have 30 days from the date of the written record sent to you after making an oral declaration, to tell us and withdraw it. Your withdrawal will cancel the declaration with effect from the date the declaration was made. If you make a written declaration your cancellation will only take effect from the date you notify us.

Do I have to make a declaration with every gift?

No. You can specify in one declaration as many gifts for whatever period you wish - for example, it can cover gifts you might already have made to a particular charity in the previous 6 years, or it can cover the gifts you make in the future (until you notigy us otherwise).

Can I pay my membership subscriptions through Gift Aid?

Yes. You can pay membership subscriptions to us through Gift Aid.

Can I use Gift Aid when I buy things from the Westie Rescue Scheme Online Store?

No. You can use Gift Aid only for outright gifts to us. You must not use Gift Aid for payments to buy goods or services - for example, Christmas cards or other goods from the Westie Rescue Scheme Online Shop. The Westie Rescue Scheme Shop is a wholly owned subsidiary and 'donates' ALL its profits on an annual basis (starting in 2005) to the Westie Rescue Scheme. As the shop in effect does not make a profit, it is exempt from paying corporation tax.

Can I use Gift Aid to pay the proceeds of fund-raising events to the Westie Rescue Scheme?

If you have simply collected money from other people, such as on a flag day, you have not given the money yourself, and the other people have not made a declaration to us that they are taxpayers, the payment could not be made under Gift Aid. However, if you have been sponsored for an event, and each sponsor has signed a Gift Aid declaration, then we can recover the tax on the amounts covered by declarations. If you are holding an event for which you require sponsorship, we have specially designed "sponsor" forms complete with Gift Aid check boxes and declarations - please email the for a copy of the form.

Does a gift I make jointly with someone else qualify for Gift Aid?

Yes, but you must tell us how much is from each of you. You will both need to give declarations if the whole amount is to qualify.

This information has been sourced from the Inland Revenue Website.

If you would like further information, please visit the Gift Aid Website at: www.inlandrevenue.gov.uk/pdfs/ir65.pdf or email the .