the Lincolnshire north federation

of

women's institutes

GIFT AID & SUBSCRIPTIONS

Since the announcement of change in the Chancellor's budget in April 2000, there have been considerable queries and suggestions that we should, as an organisation, avail ourselves of the Gift Aid scheme.  During this time, discussions with various people and authorities have been held, and certainly in the earlier times since the budget announcement, there was a large amount of confusion and doubt.

The situation is as follows:

Originally the scheme was intended to enhance the value of a taxpayer's charitable donation to the value of tax deemed to be paid on that amount.

The 2000 budget intended to change this in order to benefit charities and to counteract earlier negative tax changes.

The notes stated:-

"You may wish to give a token of your appreciation by way of a thank you to your donors for their donations.  Modest benefits received in consequence of making a donation will not stop the donation from qualifying as a Gift Aid donation, provided their value does not exceed certain limits.  If you wish to provide benefits to your donors - for example, as part of a membership scheme - you should consider whether the benefits you intend to provide fall within the limits of the donor benefit rules.  If they exceed the limits then the membership subscriptions cannot qualify as Gift Aid donations."

To qualify for Gift Aid therefore we need to establish:-

• Whether the donor (or any person connected with them) receives any benefit from making the donation.

• Does such benefit exceed the laid down limits?  (For a donation under £100.00 the benefit must not exceed 25% of the donation.)  thus, in the case of the NFWI subscriptions, the benefit should be no more than £5.50 for 2006.

A benefit is defined as "any item of service provided by you or a third party to the donor or person connected with the donor in consequence of making the donation."

Does it apply to the WI?

In the light of this definition, the NFWI has contacted the Inland Revenue on several occasions in order to clarify the situation regarding membership subscriptions.

The outcome:-

WI membership subscription could qualify for Gift Aid if:-

• The member pays sufficient tax to cover the Gift Aid in the tax year it is recoverable.

• The member does not receive in return for the subscription/donation more than 25% of the amount paid by way of benefit.

• Where appropriate, Gift Aid would be allowable on the total value paid to the WI (i.e. £26.00 in 2007).

The WI would be responsible for the correct operation of the scheme including:

• Registering with HM Revenue & Customs.

• Claiming the Gift AId.

• Obtaining and keeping the necessary paperwork.

• Confirming that sufficient tax has been paid by the member to cover the amount claimed.

• Being able to demonstrate that the benefit rules have not been exceeded.

• Being open to inspection from HM Revenue & Customs.

WIs with a total income of less than £1,000 per year can apply to take part in the Gift Aid scheme even though they do not have a Charity Registration Number.   The WI would need to send a copy of the most recent accounts and the green booklet stating the Constitution and Rules for Women's Institutes, to HM Revenue & Customs in order to prove their charitable status.

NB: Neither County nor National Federation can make any claim for moneys paid to, or through, the WI. But it would be possible for the National Federation to 'nominate' proportions to be transferred to the County or National Federation, which could take account of any Gift Aid recovered.

HM Revenue and Customs has agreed that WI subscriptions could be eligible for Gift Aid, subject to the benefit rules.

We believe that being a member of a WI does have benefits.  However, HM Revenue & Customs has said that, if the only benefit of membership is to be able to attend 11 meetings a year, and that the benefit of attending these meetings is available at no cost to non-members, then as far as the benefit rules are concerted it is unlikely that there are any benefits.

Certainly, if a non-member were charged a visitor's fee, this could be deemed to be the value of the benefit received by a member.  Therefore we would suggest that if WIs wish to claim Gift Aid they should not charge non-members to attend their meetings.  However, if a WI had already claimed Gift Aid (which could be back0dated to April 2000) and had been charging non-members, it is felt that the HM Revenue & Customs would most likely ignore this, provided that the situation had been corrected.

If all the conditions are met, then the WI could receive Gift Aid equivalent to 28% at current tax rates, of the subscription paid to them.  i.e.

Individual member's subscription:	£26.00
Gift Aid where applicable	£  7.33
Grossed up 'Donation' on which tax currently at 22% allowed	£33.33

Essentially, therefore, the decision as to whether to claim Gift Aid lies with the individual WI.

SAMPLE FORM

(The Gift Aid form is available from your WI Treasurer)