Vary gift aid by region to give deprived areas greater tax break, think tank proposes

03 Jun 2024 News

NPC logo

The next government should vary gift aid by region so donations can help boost deprived areas, a think tank has argued.

It says a variable gift aid policy, or alternative tax incentive, would enable charities working in deprived areas to be given a greater tax break than those in more advantaged areas.

NPC’s manifesto states incentives to get charities working in the right areas are a key part of delivering the next government’s agenda.

Partners for Change makes eight recommendations for improving the relationship between government and the charity sector, and nine suggestions in specific policy areas where charities can be useful partners.

“After the election, civil society should be a key partner in delivering the new government’s plans to revitalise the country,” it reads.

“But at the moment, civil society’s resources and expertise are being underutilised by the state.”

Suggested policies 

NPC says encouraging donors and philanthropists to give in the poorest areas of the country could help the new government deliver successful social change by boosting charitable activity where it is needed most.

It suggests that measures such as gift aid reform, tax incentives, and matched giving could be part of a national philanthropy and social investment strategy to maximise and effectively target giving.

The think tank is also calling for a national philanthropy and social investment strategy with charities and funders to maximise the amount of philanthropic giving in the UK.

It recommends reforming gift aid so that it is automatically collected, which it estimates would raise £564m in donations each year.

NPC is also calling for government departments to publish a strategy for how they will work with the voluntary sector. 

A responsible director from each department would report progress to a council chaired by the prime minister.

It recommends that ministerial responsibility for civil society should be moved from the Department for Culture, Media and Sport to a more central department like the Cabinet Office, where the brief previously sat.

‘Give civil society a strong voice in Whitehall’

Leah Davis, NPC’s head of policy and external affairs said: “At the moment, giving and charity work aren’t happening where they’re most needed.

“We can fix that with incentives on things like gift aid and matched giving, and bringing together existing funds to support health and jobs.

“For a new government to deliver successfully, we will need a new partnership between charities and government.

“This needs to include formal, permanent structures to give civil society a strong voice in Whitehall, local government, and the NHS.

“Charities need to stay focused on maximising their impact, supported by high-quality data from government.

“We’d also challenge larger national ones to consider what parts of their organisations they could move to boost local jobs and growth.”

For more news, interviews, opinion and analysis about charities and the voluntary sector, sign up to receive the free Civil Society daily news bulletin here.



More on