A coalition of charities and sector bodies led by CAF, the IoF, Charity Finance Group, and Charity Tax Group is asking the Government to temporarily increase the level of Gift Aid that can be claimed on donations.
In their Gift Aid Emergency Relief briefing paper, the organisations are calling for the change to help charities facing income losses as a result of the coronavirus.
Recent research from IoF, CFG, and NCVO and supported by PwC shows that on average charities are expecting a 24% loss to their total income for the year ahead.
The proposed change would see the Gift Aid claimed on every eligible donation increase by a third, up from the current one quarter. This would mean that a £100 donation from a UK taxpayer would increase to £133.33 for the charity once Gift Aid had been claimed. This compares to the current £125.00.
The coalition also seeks changes to the Gift Aid Small Donations Scheme to enable wider access across the full charity sector and increase the amount that can be claimed. It is asking for the matching rule to be removed so that the amount of GASDS top-up smaller charities can claim does not depend on the amount of Gift Aid that they have claimed in that tax year. It would also like to see the eligible donations that can be claimed under GASDS increased from £8k to £10k on a permanent basis, and the same temporary effective tax rate for GASDS as proposed for Gift Aid.
Sir John Low, Chief Executive at Charities Aid Foundation (CAF), said;
“This is a straight-forward, quick and tangible way to help charities at this most challenging time in their history. It is an emergency response in a time of crisis for the very charities providing vital services in the UK and around the world.”
The coalition, which includes support from charities including Cancer Research UK and the British Heart Foundation as well as smaller organisations such as Shropshire Cat Rescue estimates that making the change to Gift Aid could help charities to access an additional £450 million.
The group has called for the increase to be in place for two years, taking effect from the beginning of the 2020-21 tax year while charities work to recover from the crisis.
Peter Lewis, Chief Executive, Chartered Institute of Fundraising, said:
“Government support through Gift Aid is proven to be a significant nudge which increases people’s likelihood to give, and encourages people to give more. This package would be an incredibly clever way for the government to support charities and the services they provide, at the time when they most need it.”
Charity Tax Group (CTG) Chairman, John Hemming added:
“The Gift Aid Emergency Relief proposals will help charities when they need it most. We know that they are realistic, have worked before and will encourage donors to be even more generous.”
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