Gift Aid levels maintained for 3 years

Gift Aid is a hugely successful tax relief, which was worth £830 million to charities in 2006-07. In the Budget 2007 the Government announced a consultation with the charitable sector on measures to increase take-up of the relief. NICVA responded to the consultation.

Government has now published its response to the consultation. The most significant change to Gift Aid is a 3 year transitional period remaining at the 22% reclaim rate (effectively 28p in every pound) and not brought down to 20% in line with income tax.

The Gift Aid policy measures implemented by Government include

• payment of Gift Aid claims at a transitional rate of 22% in 2008-09, 2209-10,and 2010-11;
• major reform to the auditing process;
• a comprehensive programme for bringing more smaller charities into Gift Aid
• redesign of guidance ; and
• outreach to 5000 new charities a year through the launch of targeted marketing tools. (Only in England).

The consultation raised issues around the Gift Aid system and ways to alter the mechanics of the system to make it easier for some donors to give. The Government will continue to work with donors and charities to develop understanding of donor behaviour and use that to inform further thinking about Gift Aid. The Government argues that these are complex issues that require a better understanding of donor behaviour, and a full assessment of the risks that could arise if alterations were to be made to a currently successful system.

Full details of the Government's to the Gift Aid consultation are available from the HM Treasury website.

http://www.hm-treasury.gov.uk/budget/budget_08/documents/bud_bud08_giftaid.cfm