Hopes fade on sector's plan for Gift Aid reform

By Helen Warrell, Third Sector, 5 March 2008

Sector bodies are bracing themselves for disappointment when the results of the Treasury's Gift Aid consultation are announced in the Chancellor's budget statement next Wednesday.

A group of six umbrella bodies has called for charities to be allowed to claim Gift Aid at a fixed annual rate based on the proportion of donations that comes to them from taxpayers. The percentage would be agreed with HM Revenue & Customs. But some experts fear the Treasury will not endorse the plan.

The so-called accounts-based system would reduce the administrative burden on charities and boost the sector's revenues by about £400m a year, according to the Charity Tax Group, the NCVO, chief executives body Acevo, the Charity Finance Directors' Group, the National Church Institutions and the Institute of Fundraising.

"We are looking for serious commitment to changing Gift Aid in line with the joint submission," said Lindsay Boswell, chief executive of the Institute of Fundraising.

But the Charities Aid Foundation does not back the proposal. It has said the system would take decisions on Gift Aid out of donors' hands, going against the aim of encouraging giving.

Charity finance experts have told Third Sector they are not optimistic that the Treasury will accept an accounts-based system. A Government source pointed out that the proposal was only "one in a large number" of responses to the consultation.

A Treasury spokesman declined to comment.

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Barry Gower

Barry Gower, 5 March 2008, 08:50

The charity sector needs to appreciate that the getting more money is not the aim or objective of New Gift Aid - it is the effect. The object of New Gift Aid of 2000 is to encourage giving.

It seem likely (and fair) that until the authorities see that charity sector is achieving this objective they will be reluctant to review the scheme simply to allow more funds to flow into the charity sector

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