Gift Aid at record high of £1.35bn last year

The latest charity tax reliefs statistical update says the total tax relief claimed by charities in the year to the end of March went up to £3.79bn

Gift Aid claimed by charities reached a record high of £1.35bn last year, new figures from the government show.

The annual UK charity tax relief statistics update, which was published yesterday, also shows that the total amount of tax relief claimed by charities in the year to the end of March increased by £100m to £3.79bn.

The amount claimed in Gift Aid was a near £900m increase on 2017/18 and a big upturn in fortunes after three tax years in which Gift Aid income for the sector had plateaued.

Charities were previously told they were missing out on £560m of Gift Aid each year, with a report from HM Revenue & Customs last year suggesting that many donors had a poor understanding of how the system worked.

A Gift Aid awareness day was launched by the Charity Finance Group in October to improve understanding among charity staff and volunteers.

The government also estimates that half of all Gift Aid was paid out to education, health or religious charities.

Business rates were the largest relief, contributing £2.22bn – an increase of £60m on 2017/18.

Inheritance tax relief contributed £890m, the same amount as the previous year, the figures show.

Higher-rate relief meant charities received £520m, an increase of £30m on the year before.

Contributions undr the Gift Aid Small Donations Scheme rose by a third to £40m, but still far below initial estimates of how the scheme would perform when it was introduced in 2013/14.

A new law to reform and boost participation in the GASDS came into force at the beginning of the 2018/19 financial year.

The amount claimed in stamp duty land tax fell from £250m to £210m.

Payroll giving was flat at £40m, as were gifts of shares and property at £80m.

Roberta Fusco, director of policy and engagement at the Charity Finance Group, said: "It’s good to see a significant increase in the amount of tax relief for charities, and particularly good to see an above-inflation increase in the amount of Gift Aid after a slightly disappointing couple of years.

"It’s hard to draw definitive conclusions from these top-level numbers, but it’s possibly an early indication that, after a small dip in fundraising income across the sector, giving is now recovering."

John Hemming, chair of the Charity Tax Group, said he was pleased that the amount of Gift Aid claimed by charities increased by 7 per cent after a three-year plateau.

"Rates relief for charities continues to be the most valuable relief for charities, but this comes against a backdrop of higher rates bills and an ongoing squeeze on discretionary reliefs," Hemming said.

"This will need to be monitored closely because the relief is vital for many charities if they are to be able to deliver services and support their beneficiaries."

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