'Over-cautious' charities are losing out on Gift Aid

Charities are being over-cautious in their Gift Aid returns for fear of making mistakes, according to new joint research from HM Revenue & Customs and the Charities Aid Foundation.

Key Barriers to the Adoption of Gift Aid is the result of a survey of 57 organisations, including charities and intermediary bodies that help third sector groups maximise their Gift Aid claims. The interviews were carried out by Ipsos Mori last autumn.

“The research found that there are currently a number of barriers that can prevent charities from claiming, or fully utilising, this tax benefit,” said Richard Harrison, director of research at CAF. “These begin with the simple issue of low awareness of how Gift Aid works and knowledge of how to administer it. Charities are often over-regulating themselves for fear of getting the rules wrong.”

He said that survey respondents also raised the importance of good communication to the success of Gift Aid.

“Many found that the current HMRC website was hard to navigate, but they were positive about the HMRC helpline,” he said. “Charities also commented that they would like to see the Government run another national campaign to raise awareness among donors and charities.”

Harrison added that the findings had “clearly” informed the Government’s plans for improving Gift Aid, which were announced alongside the Budget last month.

“The improvements focus particularly on helping smaller charities, and this research fully supports the notion that it is smaller charities that need support to make the most of Gift Aid,” said Harrison. “The promised simplification of audits, information and guidance is exactly what they have said they want.”

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