Institute lobbies for higher rate taxpayer Gift Aid reform
Howard Lake | 18 August 2009 | News
The Institute of Fundraising is calling upon the Government to include its proposals for reforming Gift Aid for higher rate taxpayers in the Autumn pre-Budget review, with a view to implementation in 2010.
It has presented HM Treasury with detailed proposals designed to allow higher rate taxpayers to donate the full amount of tax relief which they are eligible to reclaim back to charities.
Under the current system, most higher rate tax payers believe they can reclaim the difference between the basic and higher rates of tax for themselves, but in practice the Government keeps 40% of this sum for itself. In practice very few people claim back higher rate tax relief on anything but the largest donations.
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The Institute is therefore arguing for a change in the system that would allow the charity to reclaim the full amount of tax paid by the donor. In this case, a donation of £1000 would attract a full £666 in Gift Aid, and so be worth £1666 to the charity.
Over £947 million per year is given back to UK charities through Gift Aid and Transitional Relief and the Institute believes this can be increased considerably.
Louise Richards, Director of Policy and Campaigns at the Institute, said: “We believe that with this simple change to the Gift Aid mechanism, everyone wins. If the Government is serious about its commitment to strengthening the voluntary sector, then there is no reason why it should not implement these changes.
“We are not calling for a radically new system, but for changes to the existing system which would remove obstacles to the take up of the existing concession”.
At the same time, the Institute is also working with other sector organisations including the National Council of Voluntary Organisations, Association of Chief Executives of Voluntary Organisations, Charity Finance Directors Group, Charity Tax Group and Charities Aid Foundation, to press for the further simplification of Gift Aid by changing it from an ‘opt in’ to an ‘opt out’ system.
www.institute-of-fundraising.org.uk
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.