Nine charity sector umbrella organisations have warned the Chancellor that if he does not address the complexity issues surrounding the Gift Aid Small Donations Scheme in Wednesday’s Budget, increasing the amount charities can claim may not have any benefit.
The Charity Finance Group sent a letter to George Osborne with six key recommendations for this week’s Budget announcement, which has been signed by the leaders of Acevo, the Association of Charitable Foundations, the Institute of Fundraising, Navca, the Small Charities Coalition, Voice for Change, Locality and the Directory of Social Change.
They urge the government to bring forward the review of the GASDS, which is due to take place in spring 2016.
In the March 2015 Budget the Chancellor increased the limit on which charities can claim automatic relief from £5,000 to £8,000 from April 2016. This means that charities can claim gift aid-style top-up payments of up to £2,000 a year.
“The complexity of the scheme has deterred small charities and places unnecessary barriers in the way of charities that may not have a history of fundraising. Unless these issues are addressed, it is not clear that the charities will benefit from this increase,” the letter said.
The other five recommendations are:
- Support the sector in identifying how best to raise public awareness of gift aid
- Investigate ways to maximise the benefit to charities of corporate gift aid
- Introduce a 100 per cent mandatory rate relief for all registered charities
- Initiate discussions on a sector-wide rebate to reduce irrecoverable VAT, and
- Improve the VAT exemption for shared services.
