# Budget potential for £71 million Gift Aid loss

- Link: https://fundraising.co.uk/2007/03/23/budget-potential-71-million-gift-aid-loss/
- Published: 2007-03-23T00:00:00+00:00
- Author: Howard Lake

Charities could lose out on up to £71 million as a result of the drop in basic rate
income tax from 22 to 20 per cent.
The Charities Aid Foundation (CAF) said that 
charities currently reclaim around £625 million in Gift Aid, and estimated this 
will fall to £554 million. A statement from CAF said: “While this will create additional
income for the public, charities will have to call on their donors to help make 
up the shortfall.”

However, the Chancellor also revealed that the Government would consult with charities
on measures to increase take-up of Gift Aid and will conduct an awareness-raising
campaign.

The Government also wants to carry out an awareness-raising campaign for Gift Aid
among universities and to investigate other incentives for giving to help increase
donations to the higher education sector.

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A more positive move is the additional £80 million the Government has pledged to
promote community action which will be made available to provide core funding to
grass-roots community organisations. This money will be run by the Office of the
Third Sector and be made available through third sector partners, such as community
foundations, at local level.

NCVO said it welcomed the new fund. Policy officer Mubeen Bhutta said: “NCVO has
been making the case for more funding to be available for small community organisations.
In our responses to the Third Sector Review we pressed for a small grnats programme
to support local groups’ voice and advocacy work and look forward to further details
on how this fund can make this a reality.”

The Institute of Fundraising also voiced its support for the fund and said it was
pleased to see the Chancellor’s ongoing commitment to tax-effective giving. “However,
the reduction in income tax is also likely to result in a decrease of the number
of pennies in the pound that Gift Aid can potentially add to the coffers of charities,”
said director of policy and campaigns Megan Pacey.

The Chancellor also announced that Futurebuilders will be open from spring 2008 
to support all public service delivery undertaken by the whole third sector.

There is also due to be a second consultation on unclaimed assets in the spring.

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