MP attacks government for failing to close Gift Aid loophole in Budget

30 Oct 2018 News

Neil Coyle Official Portrait

Credit: CC UK Parliament

The government has backed away from legislation to stop fundraising platforms from charging fees on Gift Aid, despite widespread suggestions at the weekend that it planned to do so.

Labour MP Neil Coyle, who has been vocal in parliament about stopping fundraising platforms charging fees on Gift Aid, said the government has “failed” donors at today’s Budget. 

Neil Coyle, the Labour member for Bermondsey and Old Southwark, said the government had failed to close the “loophole that leaves charities and good causes missing vital donations and rips off taxpayer’s generosity”. 

He also called the practice of platforms charging fees on Gift Aid “disreputable behaviour”. 

“Some fundraising platforms have been siphoning a profit even from the Gift Aid element of donations, undermining the system and abusing a loophole," he said. "The government have missed the chance to scrap this disreputable behaviour and passed the buck to the regulator to take action with no new powers or resources to do so. 

“The chancellor could have closed the loophole today but has left it open to further abuse, ripping off taxpayers and charities alike sadly.” 

Vocal criticism

Coyle has been very vocal in his criticism of the practice, and of JustGiving in particular. Two weeks ago he wrote to JustGiving calling for the platform to return some £500,000 in fees paid by those donating to crowdfunding and charity giving pages in the wake of the terrorist attacks in London and Manchester and the Grenfell Tower fire disaster last year. 

He also said that JustGiving owed users “an apology” for what he called “this horrendous breach of faith”. 

In September, Coyle also wrote to Tracey Crouch, minister for civil society, and said it was “a disgrace” that platforms could charge fees on Gift Aid. 

In a written answer to a question posed by Coyle last week, Crouch said today that “digital fundraising platforms raise significant funds for charitable causes and therefore must ensure high standards of transparency to allow donors to make informed decisions,” and praised the work of the Fundraising Regulator in updating the Code of Fundraising Practice in this area. 

The Sun ‘expected crackdown'

This follows a story carried by The Sun on Saturday which said it “expected” Chancellor Philip Hammond to “crack down on charities charging commission on Gift Aid”.

The story said that platforms had “failed to meet the government’s ultimatum to stop making profits on Gift Aid” and that JustGiving in particular had “defied Treasury Minister Robert Jenrick’s demands to drop its 5 per cent fee for donors who opt into Gift Aid - only scrapping the charge for donations to disaster fund”.

The story also reiterated calls, made by Jenrick in the summer in the newspaper, for JustGiving to stop charging fees on Gift Aid entirely.

But the expected crackdown never came.

JustGiving reacts

JustGiving announced on 15 October that it would be removing platform fees, including charging on Gift Aid, in response to what it called “major incidents and disasters” on its charity fundraising pages. The platform also announced it would completely remove all fees from its crowdfunding pages. 

As part of the announcement, it also said it would be “consulting with key charity partners” and HM Revenue and Customs to gather feedback on its charging on Gift Aid for non-emergency specific charity pages in future. 

A spokesman for JustGiving confirmed this consultation would continue, despite the government taking no action on its fee structure. 

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