A disagreement between HMRC and the Church of England over the status of Anglican PCCs and how this affected their participation in the Gift Aid Small Donations Scheme (GASDS) was finally resolved in late 2015 after almost three years of discussions.
The settlement means it’s no longer mandatory for all Anglican parishes to use the more restrictive ‘Community Buildings’ part of GASDS. Community Buildings is still appropriate for parishes with more than one church, but single church parishes can now use the wider-ranging ‘top-up’ if they wish.
‘Top-up’ has the advantage of allowing wall safe monies, donations at services with less than ten people present and donations received outside the church to be included.
Retrospective claiming of previously disallowed donations is permitted. Therefore, if you are moving to 'top-up', your church has records of wall-safe or other monies unclaimed and you have not yet reached your £5,000 limit for the 2013-14 or 2014-15 or 2015-16 years, you should claim them as soon as possible.
Bear in mind the retrospective claiming window for GASDS is only two years from the end of the tax year you wish to claim for, not four as with regular Gift Aid.
The debate between HMRC and the Church of England centred on whether or not parishes were ‘connected’. Although HMRC has now agreed they are not, it is thought that HMRC might press for a change in the law during 2016 with the aim of ensuring Anglican parishes are ‘connected’ afterall.
The position is much less clear for other denominations potentially affected by this, including parishes in the Church of Scotland and Church of Ireland. The Church of Scotland had been advised by HMRC to ensure its parishes were using ‘Community Buildings’, but at the time of writing (January 2016) had not received updated advice in the light of the CofE resolution.
Most Church of Ireland ‘single church’ parishes are thought to have always used ‘top-up’.