Editorial: Collect Gift Aid to boost the VAT campaign

Stephen Cook, editor

No one in the voluntary sector is under any illusion about the scale of the task of persuading the Government to change the unfair regulations that take so much irrecoverable VAT away from charities.

The chief executive of the NCVO has said it will take a sustained campaign that could last several years - a realistic assessment, given the current state of the Exchequer. The Government is committed to an expensive programme of public spending with the political and economic tide flowing against it, and ministers are not in the mood to do anything that could reduce revenue.

But as campaigning charities settle in the for the long haul, it would be a mistake to focus solely on the perceived complaints and injustices.

When you're trying to persuade people to change their minds, it's always useful to put yourself in their shoes and ask yourself some hard questions about whether their complaints about you might also be valid. The process quickly reveals that the chink in the collective armour of charities as they ride forth in the great VAT campaign is described by two little words: Gift Aid.

In the rush of giving after the tsunami disaster, about 60 per cent of donors made the Gift Aid declaration, which enables the beneficiary to recover the income tax on the contribution. If only it were always like that. The rest of the time, the figure is more like 30 per cent. And when the arguments about VAT reform are made in the corridors of Whitehall, an answer tends to come back along the lines of "We gave you Gift Aid five years ago, and you don't make the most of that. Come back when you've doubled the take-up."

To some extent, that's a disingenuous response. The Government itself could do more to explain and publicise Gift Aid. Spontaneous giving, such as the money put in tins in return for poppies at this time of year, does not qualify. And if ministers really wanted to make it easy, they could, for example, bring in a system that would allow all contributions to qualify automatically unless donors make a declaration that they're not UK taxpayers or are otherwise disqualified. Even so, the fact remains that one of the most useful things charities could do to boost the VAT campaign is find ways of driving up the use of Gift Aid to something like twice the current level. It might make for a better reception from Gordon Brown and his team.

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