A consultation by HM Revenue and Customs into the frequency of charity tax relief statistics has resulted in the decision to consolidate it into a single annual publication.
Following a consultation HMRC has announced that as of 2016, the statistics will be consolidated into an annual publication, released in June, instead of the three publications currently produced each year. The releases cover the different types of tax reliefs payable to charities and to individuals.
The main publication has been published in June, which included all of the figures for the most recent tax year in corresponding tables and a commentary document updated to reflect the latest trends. Subsequent publications in December and April use provisional data to provide in-year projections for the current tax year. These projections are eventually revised in the main June publication once the tax year has finished.
A consultation ran from February to April 2015 on the impact of a single publication, with HMRC receiving 24 anonymous responses.
A letter from representatives at the Charity Finance Group (CFG), Charity Tax Group (CTG), National Council for Voluntary Organisations and Charity Retail Association was sent to the HMRC in April expressing concerns over the reduction of reporting tax statistics.
It called on HMRC to keep the current service, as well as reintroducing statistics on higher rate relief on gift aid claimed by high rate taxpayers.
The CTG had been keen for the three publications to be retained on the basis that in year trends can be compared and the belief that the more information the better.
The CFG is also disappointed with the outcome.
Andrew O’Brien, head of policy and public affairs at CFG, said: "It's disappointing that HMRC has ignored concerns raised by Charity Finance Group and other sector bodies about reducing the number of publications to one a year. Publications in December and April were an important early warning system and helped the sector identify problems such as the low take up of Gift Aid Small Donations quickly.
“With publications limited to once a year, it will be much harder to identify these issues. However, we welcome HMRC's decision to look into what additional information can be published on charity tax statistics so that we can better understand which charities are accessing tax reliefs and how they use them."
In a consultation response document published today, HMRC said it will devote “some of the resources saved by the consolidation into the reintroduction of further distributional analysis of higher rate relief on Gift Aid into the National Statistics publication”.
Of those that responded to the consultation, 71 per cent were aware of the additional December and April publications. Of these, 40 per cent found them very important and 27 per cent fairly important.
Of the respondents, 35 per cent stated that the consolidation of statistics into a single publication would have a minor negative impact on their work, with 25 per cent saying that there would be a major negative impact on their work.
Suggestions for next steps to be made by HMRC were for more information including for the total number of claims by charities on the gift aid and gift aid small donation scheme, the total number of charities claiming each of the charitable tax reliefs, and the total number of charities claiming for Inheritance Tax Relief and the number of legators involved. A CTG spokesman said that additional information provisions and breakdowns would be helpful.
HMRC said it will “investigate whether it is feasible to provide any of the additional statistical information that users requested during the consultation”.
Updated statistics
Today has also seen the release of HMRC’s tax statistics. There has been a significant growth in gift aid repayments up to £1.19bn from £1.04bn in 2013-14.
The number of people using payroll giving schemes fell from 1,120,000 donors last year to 1,094,000 in 2014-15. With the gross amount donated also falling by £8m to £126m.
The total tax reliefs for charities was £3.39bn, up from £3.2bn the previous year. The relief for charities from the gift aid small donation scheme totalled £21m.
Total tax repayments of tax credits to charities has also increased to £1.21bn from £1.06bn.
Gross figures on amounts donated and tax repayments to charities on donations from an individual or company were up to £5.97bn from £5.24bn.
O’Brien said: "The big growth in gift aid repayments is a positive sign and shows that there is still significant room for increasing the amount of people that claim the relief.
"However, the poor performance of the gift aid small donations scheme is a continuing concern and we will be asking for bold changes in the upcoming review into the scheme. At a time when charities are operating in a tough financial environment, we need to make sure that they are making the most of these reliefs."
