Tax relief claimed by charities falls by £50m, says HMRC

Statistics from HM Revenue & Customs estimate charity tax relief for 2016/17 at £3.77bn

HMRC
HMRC

The total amount of tax relief claimed by charities has fallen by £50m, according to new figures from HM Revenue & Customs.

In its UK charity tax relief statistics for the 2016/17 financial year, HMRC says that the total amount of tax relief claimed by charities is provisionally estimated at £3.77bn, which is £50m less than in 2015/16.

The commentary accompanying the statistics says that the amount of relief claimed for 2015/16 was revised upwards by £150m, mainly because of revisions to VAT relief for charities and business rates, up by £100m and £50m respectively.

Last year’s total was a record amount for the charity sector, and the 2016/17 total amount of tax relief claimed is still the second-highest ever, despite the decrease, according to HMRC.

In comparison, £3.45bn was claimed in 2014/15, and £3.19bn in 2013/14.

Charitable tax relief for individuals in 2016/17 was worth £1.47bn, according to HMRC, which is a £60m increase on the previous year and a record total.

But the commentary says there was a revision in the 2015/16 figures that saw them fall by £60m, mainly due to individuals claiming £80m less in inheritance tax relief offset by a £20m increase in higher-rate relief.

There was also a small increase in the amount of Gift Aid claimed by charities, which rose from £1.26bn in 2015/16 to £1.27bn.

Repayments of tax to charities in 2016/17 amounted to £1.28bn, which is £20m less than in 2015/16. The biggest contributors to reliefs for charities were business rate relief, worth £1.87bn, and Gift Aid tax repayments.

For individuals, inheritance tax relief in 2016/17 was at £840m, compared with £800m the previous year, and higher-rate relief was up by £20m to £520m, the HMRC figures show.

The amount claimed by charities under the Gift Aid Small Donations Scheme increased to £29m from £26m in 2015/16.

Stamp duty land tax was worth £220m to charities, which is a £60m decrease on 2015/16.

Gifts of shares and property were worth £70m, which is identical to the previous year, and payroll giving tax relief was worth £40m, which is consistent with every year since 2011/12, according to HMRC.

The overall amount donated through payroll giving was £129m, which is consistent with figures for the past four years but lower than in 2012/13, when £155m was raised.

John Hemming, chairman of the Charity Tax Group, said: "We are pleased to see that Gift Aid income has increased by £10m to £1.27bn and that the GASDS has increased by £3m to £29m. This shows that efforts to promote Gift Aid have been having a positive effect, although more can still be done to maximise these important reliefs.

"The continued increase in the value of non-domestic rates relief for charities shows the vital importance of the current mandatory and discretionary rate relief and the importance of its continued protection."

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