Chancellor announces package of measures on Gift Aid
12 March 2008
Today the Chancellor in his 2008 Budget statement, announced a series of
measures to drive up levels of giving through Gift Aid.
Following a consultation launched by the Minister for the Third
Sector and the Chief Secretary to the Treasury in June 2007, the Government
is implementing a package of measures including:
Transitional tax relief worth around £300 million
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From 6 April Gift Aid claims will be paid at a transitional rate of 22%
in 2008-09, 2009-10 and 2010-11 worth around £300 million to the sector
over three years. Gift Aid remains at 28 pence for every £1 donated
through Gift Aid.
Auditing and record keeping reform
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Reforms to the auditing process by setting a de minimis error level of 4%
below which charities with claims of less than £2500 each year (2/3 of
claimants) will not be penalised for errors in record keeping and by
allowing charities to repair erros at audit before the error rate is
extrapolated across the Gift Aid claims.
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Changes to the record-keeping and claims process to allow charities to
aggregate donations under £10 in claims up to a total of £500. HMRC will
also develop a framework setting out the option to destroy enduring Gift
Aid declarations after 6 years.
Guidance and awareness support
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A new Gift Aid web information service through www.direct.gov.uk/giftaid
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The development of a Gift Aid toolkit containing all the tools and
guidance needed to run a successful Gift Aid scheme.
The Government will also continue to work with donors and charities to
develop understanding of donor behaviour and use that to inform further
thinking about Gift Aid.
Further details of the 2008 Budget announcements are available at the HM
Treasury website [external website]
Support for small charities
The Office of the Third Sector is supporting HM Treasury on work to
increase levels of Gift Aid, with a particular focus on supporting smaller
charities to access the scheme.
In response to calls for targeted guidance and support, the Office of the
Third Sector is providing new funding to the Institute of Fundraising over
the 2007 Comprehensive Spending Review years to extend the tax effective
giving initiative. This funding will support the development of a training
programme marketed to and focused on charities with less than £1 million
turnover and a new online Gift Aid Mentoring Forum, giving organisations
access to a network of experienced profesional fundraisers and
practitioners.
As part of the wider package to improve guidance on Gift Aid and to
encourage the use of Gift Aid by smaller organisations, the Office of the
Third Sector is also publishing today new guidance on a scheme whereby
local infrastructure organisations may be able to act as umbrella
charities, channelling donations and claiming Gift Aid on behalf of a
number of local organisations.
Further details on these measures are available in the Giving
section of this website.
Other third sector related announcements today
These include the publication of the Government’s Enterprise Strategy
and vision for business support. Both reflect the critical importance of
social enterprise within the mainstream business landscape.
More details are available at the Department for Business, Enterprise and Regulatory
Reform website[external website]
The 2008 Budget document also reinforces the Government’s commitment to see
three year funding agreements with the third sector as the norm.
