Finance: Whitehall holds back on tsunami Gift Aid demands

The Government is resisting calls from the sector to allow Gift Aid to be claimed on the huge spontaneous donations to the tsunami disaster fund.

Traditional street-corner collections have played a vital role in making the Disasters Emergency Committee's fundraising appeal the largest in British history.

But anonymous donations are not eligible for Gift Aid because there is no audit trail to trace the taxpayers who make them.

The Charities' Tax Reform Group wants the Government to make a one-off Gift Aid donation to the DEC of 28p for every £1 given spontaneously.

"This is a major appeal to which people have donated magnificently and the Government should be creative in responding to it," said the group's chairman Nick Kavanagh. He added that safeguards would have to be built in to prevent fraud, but the group was happy to discuss the issue with ministers.

DEC chief executive Brendan Gormley backed the idea. "The DEC supports the charity fundraising lobby in its efforts to encourage imaginative, tax-effective giving. We want to maximise our income," he said.

Mark Astarita, director of fundraising at the British Red Cross, said: "It's a good idea and if the Government can do it with VAT, they can do it with Gift Aid."

But a spokesman for the Treasury said the idea wasn't being considered by the Government. He said the Government had already donated in a range of ways, including reimbursement of VAT costs.

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