Tax relief on giving is expected to rise by 11 per cent in the year to March 2015, suggesting a large increase in donation income, according to provisional figures published today by HM Revenue & Customs.
HMRC has published provisional figures for the year ending March 2015, showing it expects gift aid to rise from £1.07bn to £1.19bn. This follows three successive years in which the value of gift aid fell.
Gift aid figures are a relatively effective indicator of total giving, although not a perfect one because charities have four years to claim relief.
In addition in recent years gift aid has been affected by the removal of transitional relief, which compensated charities for a reduction in the basic rate of income tax and was worth an extra 10 per cent on the value of gift aid.
Gift aid has also been affected by the introduction of a new online claiming system, which is believed to have reduced total claims last year and is likely to have led to a compensatory increase this year.
There is also the potential for substantial revision of the figures. HMRC said last year that it expected gift aid figures to rise by £50m year-on-year, but it actually fell by £20m.
Tax relief for donors claiming the higher rate of tax is also expected to be up by around 12 per cent, to £470m.
Overall tax relief up 8 per cent
The same figures show that total tax relief for charities and donors is expected to rise by £330m in the year to March 2014, according to provisional figures published today by HM Revenue & Customs.
Business rate relief, the sector’s most valuable tax relief, is expected to rise 8 per cent to £1.64bn, while inheritance tax relief for individuals is expected to rise by 7 per cent to £630m.
Small donations relief quadruples in value
The figures also show a fourfold increase in the use of the Gift Aid Small Donations Scheme, which increased in value from £6m to £23m.
This figure is still only a fraction of original predictions from HMRC which suggested GASDS would have raised £135m for charities by March 2015. However it shows a significant improvement in uptake of the scheme.
