Gift Aid Reform
Back in July, I asked why we kept ‘exploring’ ways to improve the Gift Aid system as opposed to just getting on with it; a sentiment developed by CAF’s John Low at the launch of the 92-page ResPublica Digital Giving – Modernising Gift Aid; Taking Civil Society into the Digital Age in early September.
Having commissioned what stands as the most thorough analysis of Gift Aid and its operational challenges published so far, he asked whether we could “rise to the challenge” laid down by the research and urged the government not “just to leave it as a really good report” on the shelf.
The six recommendations kick off with the requirement to lodge Gift Aid claims online (“any reform will be incomplete without this change”) and sets out with impressive financial evidence why “everybody is set to benefit from the right online system”. Such a system needs to be able to keep up with modern technology – particularly with the growth in text message giving.
So it was particularly unfortunate that, at the same time, news was breaking about the six million employees found to have paid the wrong amount of tax as a result of computer system problems at HRMC a year ago. With 1.4 million of them staring at tax repayment bills averaging £1,428, the inability of an antiquated tax system to cope with the most basic requirements of collecting taxes for the Exchequer was thrown into the public eye.
Nick Hurd, the minister for Civil Society, promised that he would make sure that his Treasury colleagues gave the excellent ResPublica report full consideration and agreed with this magazine’s observation that the speed of adoption of any of these great ideas depended on the effective digitalisation of a somewhat antiquated HMRC.
When employees and employers first encountered online self assessment and end-of-year returns, there were expensive teething problems but the process is routine now. So, change is entirely within the government’s grasp – provided it appoints a competent contractor. The challenge facing the minister is ensuring that at least the first stage of the Gift Aid wish list is included in the Treasury’s specification of what a modern, properly functioning tax collection machine needs to do.
With £750m in Gift Aid from basic rate taxpayers going unclaimed each year because of the sheer bureaucracy, something clearly needs to be done. The bottom line is that HMRC’s overall capacity to release much-needed funds back to the sector requires government investment. As the report points out – current inefficiencies are very expensive. It might be more expedient to just push – with one voice – to get the basics through and remind the government of what the sector would give back to help pay for it all.
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
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