Charities across the UK collectively received £1.6bn in gift aid last year, but fewer organisations received money through the tax relief, new government data shows.
HMRC’s UK charity tax relief statistics, published this week, also show that overall reliefs for charities rose by 8% to £4.27bn.
This includes £2.39bn of business rates relief, down from £2.4m the previous year.
Meanwhile, payroll giving to charities dropped to a seven-year low.
Fewer charities receive gift aid payments
HMRC’s figures estimate that charities received £1.6bn in gift aid in the year to April 2023, up from £1.34bn in 2021-22 and the most in at least eight years.
However, 64,160 charities and community amateur sports clubs received money through gift aid in 2022-23, compared to 65,470 the year before and the fourth consecutive yearly decline.
Lower-value gift aid payments (under £1,000) declined for the fourth year running to 23,110 while bigger payments (over £1m) rose by a quarter to 190.
Payroll giving to charities drops to seven-year low
Charities received £9m less through payroll giving last year, with money from that source dropping to its lowest seven years.
HMRC’s data shows that employees donated £128m through payroll giving in 2022-23, the lowest amount since 2014-15 and down from £137m in 2020-21.
Some 516,000 employers offered payroll giving to their workers in 2022-23, down from 545 in 2021-22 and 591 in 2020-21.
Philippa Cornish, head of corporate clients at the Charities Aid Foundation, said: “It’s concerning to see a sustained fall in the number of people participating in payroll giving schemes.
“Employers should see payroll giving as an important part of their employee value proposition, and a powerful way for their people to make a positive impact in their communities.”
CFG: ‘A few troubling points’
Richard Sagar, head of policy at CFG, said: “It’s very positive to see that gift aid rates are up this year, along with those from the gift aid small donations scheme (GASDS).
This not only demonstrates the generosity of the British public, but also shows that charities are working harder than ever to maximise every penny of these vital tax reliefs.
“However, there are a few troubling points to note from the government’s latest charity tax relief statistics.
“The total number of organisations that are benefiting from gift aid has fallen by 2%. This suggests that there’s still a long way to go when it comes to maximising the value of donations, so that more people and communities benefit.
“It’s also worth noting that the maximum donations limit under GASDS has been £8,000 for some years and we believe that this should be increased, particularly as we’re now in a time of high inflation and high energy costs.”
CTG: Increases welcome
Richard Bray, Charity Tax Group chair, said: “The increase in donations from higher-rate taxpayers is a welcome demonstration that donors recognise that charities have needed support at a very difficult time.
“The increase in gift aid is also welcome and is perhaps a reflection of the bounce-back in fundraising events following the various lockdowns.
“The reduction in payroll giving is disappointing and it would be interesting to explore what may lie behind this – is it perhaps a reflection of changing patterns of working?”
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