Budget announcements on gift aid and inheritance tax welcomed by charity sector

Finance | Niki May Young | 23 Mar 2011

Changes to gift aid, inheritance tax and mileage rates have been welcomed by sector leaders after a Budget announcement hailed as the “best Budget for charities in years”.

Caron Bradshaw, chief executive of the Charity Finance Directors' Group, was impressed by the prominence of charity matters in George Osborne’s speech this afternoon: “It’s refreshing to hear the Chancellor making reference specifically to the charity and voluntary sector rather than having to scrutinise the background papers for details of how announcements might impact us,” she said.

“There are a number of positive announcements which we are pleased to see and welcome,” she added, “not least the announcement of a move to online filing and gift aid simplifications for donations up to £5,000. We are also pleased to see the extension of mileage rates to passengers and the reduction in fuel duty which will be of help to charities in keeping overheads down.”

Charities Aid Foundation chief John Low went a step further in his praise stating: “The Chancellor has today delivered for charities and those who want to support them.

“The commitment to bring gift aid into the 21st century will revolutionise this important tax relief and go a long way towards reducing the £750m that goes unclaimed each year. We are also pleased to see they have implemented our recommendation to remove restrictions around thanking donors,” he added, referring to increased limits for in-kind services provided to major donors from £500 to £2,500.

The Philanthropy Review, which called earlier this week for gift aid to be able to be claimed automatically on small donations, praised the government for taking the suggestion on board but said it didn't go far enough.

Chair Thomas Hughes-Hallett said: "We welcome the intentions of the announcement concerning gift aid for small cash donations as this indicates that the government has recognised the need to release these funds to which charities are entitled.

"But we are disappointed at the very modest level of the threshold up to which gift aid can be claimed without the need for gift aid declarations. This means that any charity raising more than £5,000 in small cash donations will miss out."

But the Institute of Fundraising was more upbeat, calculating that the new allowance would give charities an extra £1,250 per year, to be received from 2013. It said it bore resemblance to the ‘gift aid light’ idea put forward to the government’s gift aid forum by its working party during 2010, and will make a significant difference to charities’ incomes.

The resounding discussion on social media platforms and in published comments surrounded legacy reforms. The public is being encouraged to donate after their deaths by a 10 per cent discount on the inheritance tax rate if 10 per cent is donated to a charity in a will. Accountants BDO commented that the new reliefs “chime with the Big Society”, while Urban Forum CEO Toby Blume and NCVO head of research Karl Wilding suggested that the change might mean that a greater number of small charities would benefit from legacies.

However, while Richard Woolich, tax partner at global law firm DLA Piper said "this is the best budget for charities in years", Acevo chief executive, Stephen Bubb, maintained a cautious outlook. “This budget leaves a legacy of better giving for generations to come. But now we need Govenrment to get a grip on local cuts so that today’s generation of charities is still around to benefit tomorrow," he said.

"I will also be making clear that in addition to the positive measures in the Budget, we need action now from the government to get a grip on local cuts to the voluntary sector. That is where Acevo will be focusing our efforts in the coming days," he added.

Comments

[Cancel] | Reply to:

Name *

Email *

Organisation

Job Title

Comments *

Verification *

* Please read our Community Standards

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

Robust but respectful debate
Strongly held opinions
Intelligent relevant discussion
The sharing of relevant experiences
New participants

We will not publish:

Rude, threatening, offensive, obscene or abusive language, or links to such material
Links to commercial organisations or spam postings. The comments board is not an advertising platform
The posting of contact details for yourself or others
Comments intended for malicious purpose or mindless abuse
Comments purporting to be from another person or organisation under false pretences
Gratuitous criticism, commentary or self-promotion
Any material which breaches copyright or privacy laws, or could be considered libellous
The use of the comments board for the pursuit or extension of personal disputes

Be aware:

Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
Comments left by others may not be accurate, do not rely on them as fact
You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

Enjoy the opportunity to express your opinion and respect the right of others to express theirs
Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.