Total tax-eligible donations to charities have dropped for the first time year-on-year, according to figures published today by HM Revenue & Customs.
The total amount from donations that was eligible to be taxed was £5.04bn in the year to March 2018, which is slightly lower than £5.08bn the previous year and £5.05bn the year before.
This could be due to a fall in overall donations to charities or a reduction in the amount of people who are eligible to pay tax.
Despite this, the amount of overall tax reliefs for charities and individuals combined rose to its highest level of £5.08bn, up from £4.84bn the previous year.
Previous years’ figures have stated a higher overall figure, but this included an estimated total for VAT relief for charities, which is worth about £200m.
The rise this year has been driven by an increase in business rates relief to £2.09bn, up from £1.91bn the previous year.
Meanwhile, the Gift Aid Small Donations Scheme (GASDS), intended to raise more than £100m a year for charity, raised only £30m, the same as the previous two years.
Sector reaction
Charity Tax Group chair John Hemming said: “We are pleased to see that Gift Aid income is at a similar level but it shows that more can be done to maximise this important relief through improved promotion and donor understanding.
“The lack of an increase in the take-up of GASDS is disappointing although hopefully some of the recent changes will make an impact next year.
“Increasing the eligible donation to £30, in line with the contactless limit, would be an obvious next step that should increase the attractiveness and practicality of the scheme.
“The continued increase in the value of non-domestic rates relief for charities shows the vital importance of the current mandatory and discretionary rate relief and the importance of its continued protection.
“It is disappointing that HMRC is no longer able to provide accurate estimates of the value of VAT reliefs for charities as this is very valuable information”.
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