Government responds positively on Gift Aid consultation
April 2008
The Government has announced a package of measures aimed at increasing the take-up of Gift Aid over the long term, the boldest of which was the Chancellor’s decision to continue to pay Gift Aid claims at a transitional rate of 22% for the next three years.
The full response is downloadable from the Treasury’s website.
Helen Donoghue, Director of the Charity Tax Group commented: ‘We are delighted that the Chancellor has recognised the importance of supporting large and small charities in this positive way. This transitional relief gives the Government sufficient time to look at the Gift Aid system as a whole and the positive proposals put forward by the sector to simplify and modernise this important relief and improve take-up of it’.
However it is not looking at all likely that any Gift Aid reforms will involve a radical departure from the current income-tax based system. An OTS spokesman told Caritas magazine: ‘The Government has considered all the proposals and is continuing to develop Gift Aid . The proposals are complex and require a full assessment of the risks to the benefits of the current system.
The benefits of keeping Gift Aid in the tax system in its entirety are that as a spending measure there would be no guarantee that Gift Aid would have risen as fast as it has done as it would have to compete alongside other spending priorities.
In the tax system there is also the explicit link between the tax paying donor and the amount of money that a charity can raise which ensures that charities retain control over their income and can build relationships with donors’.
Christopher McMullen, 23/05/2011
Dear sirs, When Payroll Giving was introduced nearly 20 years ago, as an employer of 20 staff I looked to install GAYE. It looked good but failed in its application.All our staff had different wishes and we found that very few charities were represented by the GAYE administrator, which denied the staff the choice to meet their wishes.They generally did not wish to sign up to support a "large" charity, feeling they would lose "local"accountability. Whilst we revisited GAYE every few years it never changed, so staff made their own arrangements. As an employer we were unable to directly assist their giving, and therefore unable to bolster staff moral through direct support. Until GAYE can overcome this restriction it will remain a small portion of the charitable giving, being operated predominantly by the "major companies" who nominate the charity to support. It also denies SME's the opportunity to reach out to into the local arena, which is where the majoity of giving would benefit "The Big Society" ideas being promulgated by the current government.