Failure to claim Gift Aid 'cost sector £1bn in 2007'

UK charities missed out on £1bn last year through donors' failure to use tax-efficient schemes such as Gift Aid and payroll giving, according to a new analysis.

The annual Take TaxAction report, produced by financial advice website, found that the amount lost by the sector to the taxman was nearly £230m more than in 2006.

The report, based on information published by HM Revenue & Customs and the Department for Work and Pensions, says failure to use Gift Aid (£700m) and payroll giving (£337m) added up to a net loss of nearly £1.04bn. Almost £9bn was donated to UK charities in 2005/06, according to the Charities Aid Foundation's Charitable Giving report.

Megan Pacey, director of policy and campaigns at the Institute of Fundraising, said HMRC figures showed that Gift Aid claims were actually increasing.

She said: "It is wrong to assume that every donation could be Gift-Aided: we estimate that a third couldn't be. Some charities have made great headway and are claiming as much as possible."

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