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Gift Aid

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Gift Aid (UK)

iMIS Gift Aid allows UK charities to reclaim tax on Gift Aid donations, which adds a significant percentage to the value of a gift at no cost to the donor.

In iMIS you can:

* Record and manage Gift Aid declarations from your donors.

* Generate data for Gift Aid tax reclaims.

* Create tax reclaim reports for HM Revenue & Customs (HMRC).

How Gift Aid Works

Let's say Paul earned £1000 last month. Assuming he pays regular income tax on his earnings at the basic rate of 20%, £200 in tax was deducted from his pay, and Paul took home the remaining £800 in his paycheck. In other words, £25 was deducted in tax for every £100 Paul took home in pay: (£200 tax / £800 take home pay) x £100 = £25.

Paul then makes a donation of £100 to your charity. If Paul completes a Gift Aid declaration, you can reclaim the £25 he paid in tax on this £100 donation. So, in total, your charity receives £125 (£100 donation + £25 tax reclaim) at no extra cost to Paul.

Changes to Gift Aid from April 6th 2008

Since April 6th, 2000, charities have been able to claim Gift Aid relief on the basic rate of income tax on all donations received, providing the individual donor consented and the donation was eligible for tax relief. The basic rate of income tax was set at 22%.

As of April 6th, 2008, the basic rate of income tax has changed to 20%, reducing the amount of Gift Aid relief available to charities. However, the government has instituted a period of transitional tax relief that will last from April 2008 to April 2011. During this transitional time, charities can claim 20% Gift Aid relief on donations, and the HMRC will make up the remaining 2%.

Charities do not need to make a special claim for transitional...

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...st be excluded from a tax reclaim as they are already tax efficient - i.e. the tax reclaim is managed by the organization (e.g. CAF) that issues the voucher. If you accept donations via such payment methods, you must create cash account codes for them and exclude these cash account codes from your reclaim to prevent the tax being reclaimed twice.

o Categories - Lists any custom billing Categories you have set up in iMIS. Billing Categories only appear in the list if you have enabled the Use Bill Categories option in iMIS and created categories.

o Customer Types - Lists your iMIS Customer Types. Excluded customer types do not appear in tax reclaims. For example, you should exclude customer types that relate to non-individual contacts, such as companies or charitable trusts. Gift Aid can only be claimed against donations from individual supporters.
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