The Institute of Fundraising’s head of policy has criticised HMRC's proposed changes to gift aid as making the system more complicated, rather than less.
Daniel Fluskey spoke at yesterday’s Charity Finance Group tax conference to outline the IoF’s response to the government’s consultation on how to increase the level of gift aid take up on digital donations, such as those made online or by text message.
Fluskey revealed that meetings with HM Treasury and HMRC have bought up “lots and lots of complications and caveats and hoops to jump through”.
In relation to the consultation, which closes on 20 September, Fluskey said that the Institute believes that HMRC’s proposal to make the gift aid declaration simpler is a better move than its idea of having a two-tiered system, whereby gift aid liability is switched from donors to charities for amounts under a certain threshold, which could be anywhere between £1,000 and £5,000, according to HMRC.
“Gift aid works best for both donors and charities when it’s simple,” Fluskey said. “Things such as thresholds and two tiers of declaration don’t make it more likely that a donor will engage.
“We think the more references to HMRC and tax there is in a declaration, the more confusing it is. We have an overall aim of increasing uptake of gift aid, but actually what we’re getting are more complicated processes.”
He added that it would be better if donors and fundraisers had an input into the wording on the gift aid declaration – rather than “four civil servants sitting in a room in a basement with little natural light”.
Fluskey also revealed that the Institute of Fundraising will be collecting more evidence from donors to gauge their present understanding of gift aid statements.
Nick Aldridge, chief executive of the PayPal Giving Fund, also spoke at the CFG event and shared similar grievances over the complexity of the proposed declaration and also questioned whether there is a need for a two-tier system.
He said that he would like to see "serious thought" given to overcoming barriers to establish a universal gift aid declarations database.
The criticisms of the proposed new system comes as HMRC figures show the value of gift aid claims overall for the charity sector has declined for the third consecutive year.
