# Gift Aid claims by charities fall for the second year in a row

- Link: https://fundraising.co.uk/2013/10/11/gift-aid-claims-by-charities-fall-second-year-row/
- Published: 2013-10-11T10:04:45+01:00
- Author: Howard Lake

Figures from HMRC for the 2012/13 financial year show that [£1,002 billion was repaid to 63,740 charities making Gift Aid claims](http://www.hmrc.gov.uk/statistics/charity/table10-4.pdf),
a 5% drop from 2011/12 which recorded 66,370 claims totalling £1.052 billion. This
is the second year in a row that the total reclaimed has dropped from its 2010/11
peak of £1,071billion.

In spite of this, numbers still remain considerably above what was reclaimed in 
the pre-recession years of 2007/08, when £895 million was re-claimed by charities.

On the face of it this appears to be a worrying trend for charities. On the other
hand the underlying picture is more complex.

## Advertisement

## Effect of reduced income tax rate

In April 2008 the basic rate of income tax was reduced from 22% to 20%. This had
an impact on reducing the amount of Gift Aid which could be recovered by charities.
In order to ease this problem, the government agreed to provide transitional relief
on donations made for the following three years.

The value of transitional relief has been declining over the past few years; from
£120 million in 2010-11 to £50 million in 2011-12, and then to zero in 2012-13. **
It is this decline in transitional relief which has driven the overall fall in recovery
of Gift Aid.** In fact the amount claimed for underlying Gift Aid (excluding transitional
relief) has actually continued to increase during the years of 2010/11 through to
2012/13.

## Underlying Gift Aid has grown since 2008

So, despite the headline figures suggesting a decline, the underlying trend is positive
for Gift Aid claims. Indeed, the value of claims on underlying Gift Aid, excluding
the transitional relief element, has continued to grow from 2008/09 to 2012/13 despite
the difficult economic times.

The one element of data that might be less positive is the decline in the number
of charities making Gift Aid claims. However, this figure has fluctuated over the
years, with no clear trend.

 * **[New research on what makes remarkable corporate partnerships with charities](https://fundraising.co.uk/2013/10/11/new-research-what-makes-remarkable-corporate-partnerships-with-charities/)**(
   11 October 2013)
 * **[List of over 2,000 Scottish funding sources published](https://fundraising.co.uk/2013/10/14/list-over-2000-scottish-funding-sources-published/)**(
   14 October 2013)
 * **[Have yourself a merry small charity Christmas](https://fundraising.co.uk/2013/10/18/have-yourself-merry-small-charity-christmas/)**(
   18 October 2013)