Gift Aid

bkmla

This question is about the eligibility of a donation for inclusion in the Gift Aid scheme.

 

A trustee of a registered charity, i.e. a church, and another person, who is a member of the church, run a youth ministry for the church.

 

Although the church has a bank account, subscriptions are paid into and expenses paid from a current account held jointly in the names of the trustee and the church member. The account is used exclusively for the youth ministry.

 

The trustee recently made a donation of £50 to be used for the youth ministry. However, this donation was not made into the bank account held by the church, but into the bank account held jointly by the trustee and the church member.

 

The Trustee has completed a Gift Aid declaration.

 

My question is this. Because the donation from the trustee was lodged in a bank account in her name and the name of the church member, does this mean that it is not eligible for inclusion in the Gift Aid scheme, even though it was for the exclusive benefit of the church via its youth ministry?

bkmla

I should also mention that the balance of the bank account held jointly by the trustee and the church member is included in the balance sheet of the church as cash-in-hand.

I am treasurer of the church.

Savvy_Sue

I'm not sure it is eligible for Gift Aid - I don't want to dogmatically say no it's not, but I can't see how funds given to a non-charity account can be Gift Aided, but possibly if it was passed direct to the church's account from the 'personal' youth work account it could be? - but I suspect there's a helpline you could call to check. 

For me with a treasurer's hat on, having a separate account in personal names for a section of the church's ministry would raise all sorts of red flags, even if it's included in the church's balance sheet. 

Some of the reasons for those red flags:

• If either of those people die, the money will be regarded as part of their estate. 
  
  
• Or if either of them faces divorce, the account could / should be included within their assets
  
  
• Or if either of them has to claim benefits, the same
  
  
• If either of those people falls out with the church or each other, retrieving the money could become interesting
  
  
• Unless the church has sight of the bank transactions (and it doesn't sound as if you do from the note that you're treating it as cash-in-hand) you have no guarantee that the funds are being used as intended, or that there is proper oversight of the money. 

I can't understand why the transactions can't pass through the main account with income marked as restricted for youth work, and I'd be pushing for that. Failing that, I'd want the account turned into a separate church account, under the same authorisation protocols as the main account, with the same auditing process. I know as Christians we should be able to trust others, but even if you can trust them completely, you should not do so. Transparency in everything! 

bkmla

Thank you for your sound advice.

Savvy_Sue

Well, I hope it's sound - even if you can get round the Gift Aid on this occasion, the rest of it would worry me.

But it occurs to me that the Gift Aid issue may provide a tactful approach to resolving this - rather than "this is not the way to run accounts associated with the church" (which is my gut reaction!) you could start with "Jim, I know you wanted to Gift Aid the donation you made to the youth work funds, but because it wasn't paid into the church account it's not possible for me to claim for it. Ideally I would prefer the youth work funds to be channelled through the main account, as restricted funds: could we discuss how we could make that work?"

One reaction might be along the lines of needing to pay for things either in person (taking the young people bowling, for example) or in a hurry (needing to secure a booking for the weekend away). If you can assure them that agreed expenses are refunded promptly, that may (in my opinion should) help. 

Another objection might be along the lines of not knowing what's in the account and whether a young person has paid their subs. That's where a separate account might be needed, but still in the church's name - it's quite common to have more than one account, either identified with its purpose (youth work) or just the No. 2 account. Assuming you do internet banking you could set those involved up with authority to View the account, and perhaps - depends on your setup - to Submit payments which another person then Authorises. 

Personally I don't find running an additional account makes a lot of difference to producing my end of year accounts, but it might depend on what package you're using. It might generate more work for you overall, but at the moment you have no way of knowing what's going on! As I said, transparency is everything! 

You probably want the church leadership / other signatories on side, but if you don't get the support you need there, you may have a denominational regional finance person you can approach. Another useful contact if you need to get the Big Guns out would be an organisation called Trust Advice - they used to be AFVS, and they still do Independent Examination. If you ran your first posts past them, I suspect their response would be similar to mine! 

I do get that the youth leaders are almost certainly highly valued and rightly trusted members of the church team, and others may not want to risk upsetting them, but even so ... 

sheramber

Which bank account is registered for Gift Aid? That is the one that a Gift Aid claim would be made from.

 

Robin9

sheramber said:

Which bank account is registered for Gift Aid? That is the one that a Gift Aid claim would be made from.

 

 

It's not to do with Bank Accounts - it's the Charity is which is registered.

Our Church is similar and there are several parts - Flower Arrangers, Bell Ringers - which have have their own bank accounts but it is the Church itself which is registered for GA. All donations where the donor who wants to complete the GA Declaration have to be made through the parent body.

sheramber

Robin9 said:

sheramber said:

Which bank account is registered for Gift Aid? That is the one that a Gift Aid claim would be made from.

 

 

It's not to do with Bank Accounts - it's the Charity is which is registered.

Our Church is similar and there are several parts - Flower Arrangers, Bell Ringers - which have have their own bank accounts but it is the Church itself which is registered for GA. All donations where the donor who wants to complete the GA Declaration have to be made through the parent body.

are these accounts named as     church accounts.

In the OP's case the account is in the name of the persons using it.