Gift Aid is sector's responsibility, says HMRC

Fundraising | Becky Slack | 2 Apr 2008

The government has said it is the sector’s responsibility to increase take-up of Gift Aid if it is to avoid losing income as a result of cuts to income tax.

As reported by PF on the Charity News Alert, charities could lose out on up to £100m in Gift Aid as a result of income tax being reduced from 22 to 20 per cent next April. The 2 per cent cut means they can only reclaim 25p from every £1 donated rather than the current 28p.

However, the government has said that while it recognises the amount of Gift Aid repayable will drop there is “significant scope” for the charitable sector to increase take-up overall. “HM government welcomes the views of Charities Aid Foundation that an additional £700m Gift Aid tax relief could potentially be claimed by charities,” said a spokesman for HMRC, referring to CAF figures that state current Gift Aid claims, which total around £600-700m, account for just one-third of donations and that a further third could easily be converted.

A consultation into Gift Aid was also announced in the budget on 21 March 2007. This will see the government working with the sector to unlock a large proportion of the unclaimed Gift Aid and to maximise the benefit received by the sector through this tax relief.

Details are to be announced shortly with a view to reporting back in the Pre Budget Report in the autumn.

Who's Who: Becky Slack

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