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David Blunkett urges Chancellor to reform Gift Aid
By David Ainsworth, Third Sector, 10 November 2009
Former home secretary calls for opt-out system
Former Home Secretary David Blunkett is lobbying the Chancellor, Alistair Darling, in support of an opt-out system for Gift Aid.
He has written to Darling to call for a series of reforms to the Gift Aid system to be announced in the pre-Budget report, which is expected to be published in early December.
A coalition of third sector bodies, including chief executives body Acevo, the Institute of Fundraising and umbrella body the NCVO, wrote last month to Stephen Timms, financial secretary to the Treasury, setting out their frustration about a perceived lack of progress on Gift Aid reform (27 October, page 2).
"I am backing a consortium of voluntary organisations in seeking simplification, the avoidance of the nightmare paper trail and automaticity - which would be a tremendous help to the charitable sector and would reduce administrative bureaucracy," Blunkett told Third Sector.
In the letter, he called on the Treasury to simplify the system. "I do hope that you might be able to do something on Gift Aid in the pre-Budget report," he wrote. "You've already safeguarded it for the two years ahead, but it's the sheer mind-blowing paper-chase bureaucracy that everyone I speak to is keen to set aside.
"I haven't heard a good argument for not doing so other than that it might cause some inconvenience in terms of having to set up a new system, but it would be a tremendous boost."
Blunkett said he had been pressing Timms on the subject since producing his report on the third sector, Mutual Action, Common Purpose: Empowering the Third Sector, at the end of 2008.
A Treasury spokesman said: "Gift Aid is a very successful scheme and any changes need to be very carefully thought through.
"Decisions on any changes are a matter for the Chancellor through the normal Budget process."
IOF STANDS FIRM ON TAX
The Institute of Fundraising will press ahead with a campaign to reform Gift Aid for higher-rate taxpayers, despite being told by HM Revenue & Customs that it is based on false assumptions.
The institute has said that 10 per cent of tax on a higher-rate donation cannot be reclaimed by a donor or a charity, but HMRC says the tax can be reclaimed (6 October, page 2).
"We remain convinced not all tax can be reclaimed either by the donor or the charity," said Lee Grant, tax-effective giving project manager at the IoF.
* See Editorial, page 13
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