Government seeks to increase Gift Aid donations
HM Treasury has recently confirmed that the Gift Aid model declaration form is to be improved in order to stop charities losing out on Gift Aid. The National Audit Office (NAO) estimates there are donations of around £2.3 billion where Gift Aid is not used. Whilst not all of these donationswill be eligible for Gift Aid, the government is working with charities to boost the number of eligible donations. One of the improvements suggested include making the language used about Gift Aid more straightforward to enable donors to decide if their donations qualify for relief.
The Exchequer Secretary to the Treasury, Priti Patel said:
‘Gift Aid is an important tax relief for charities which helps to provide essential revenue to charitable causes. This research shows that there is more that government can do to boost eligible donations which is why we are simplifying the declaration forms to make sure donors understand when they’re eligible so that charities can maximise the financial donations they receive.’
The Gift Aid scheme is available to all UK taxpayers. The charity or CASC concerned can take a taxpayer’s donation and, provided all the qualifying conditions are met, can reclaim the basic rate tax. Higher rate taxpayers are eligible to claim relief on the difference between the basic rate and their highest rate of tax.
There are special rules to restrict the availability of Gift Aid relief where the donor receives a benefit above a certain level from the charity or where a substantial donor has certain transactions with the charity.