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CAF calls for Gift Aid to remain a tax incentive for giving

Howard Lake | 2 October 2007 | News

Boost your donation by 25% with Gift Aid - sign at Bristol Museums and Galleries. Photo: Howard Lake
Photo: Howard Lake

CAF has contributed to the debate on the future of Gift Aid by calling for it to remain a tax incentive for giving rather than a ‘fixed pot of money available to the sector’.

John Low, Chief Executive of CAF said: “Many Gift Aid proposals have focused on how charities can access the tax that could be available through Gift Aid, rather than looking at how Gift Aid should be used as leverage to grow giving in the long-term.

“While it’s clear that incentives do not in themselves stimulate altruism, many donors consider them to be an important palliative to the ‘pain’ of giving and therefore they should be protected and nurtured”.


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He added that: “Gift Aid is essentially donor’s money, which they can choose to pay as tax or give to charity. It is within the gift of the donor and it is important that Gift Aid remains so.”

This puts CAF at odds with the six other sector bodies, including acevo, Charity Finance Directors Group and the Institute of Fundraising, which last week called for Gift Aid to be simplified by turning into a set sum based on the size of voluntary income per charity and the proportion of supporters who could be assumed to be taxpayers.

In its submission to the Gift Aid review, CAF has emphasised the need to simplify the Gift Aid process for charities and has called for greater training and support for charities not currently participating in the scheme.

CAF has also proposed the creation of an insurance product to reduce the impact on charities found to owe money following an HMRC Gift Aid audit; a flat rate of Gift Aid reclaimable on cash collections; and a personal tax incentive for those wishing to establish a charitable trust.

CAF has undertaken a joint qualitative research programme with HMRC designed to examine the barriers charities face when using Gift Aid.

The research, due to report in November, will provide an insight into the attitudes and behaviours not just of those charities currently using Gift Aid, but of groups where take up of Gift Aid is at its lowest.