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Gift Aid on items donated to charity shops

Comment 6th July 2010

The Gift Aid scheme for goods donated to charity shops should be simplified to encourage charitable giving and help charities carry out their vital work.  Members of the public that wish to Gift Aid donated goods should be allowed to make an enduring declaration for all their donations to charity shops.

Why does this matter?

Income generated by Gift Aid is an important source of financial support for the vital work that charities deliver.  But charities that wish to claim Gift Aid on proceeds from the sale of donated goods must write to the donor to inform them of the value of the items sold and to confirm that the money will be taken as a donation.  The charity must then wait at least 21 days before treating the money as a donation for Gift Aid purposes. 

The current process is cumbersome to administer – charities are forced to send out thousands of letters a year, which costs thousands of pounds in staff time and postage costs.  This is a poor use of charitable resources. It may also damage the relationship between charities and donors who wonder why we are spending money on writing to them and repeatedly ask us not to.

Another loop hole allows the donor, having received a letter, to contact the charity and ask for the entire value of the goods sold, which means charity shops losing out on even more vital revenue and the shop being used like ‘ebay’ to sell people’s goods.

The Government should allow members of the public that wish to Gift Aid donated goods to make an enduring declaration for all their donations to charity shops, in the same way that they can make lasting declarations for regular cash donations.  Members of the public wishing to make a one-off donation to a charity shop should also be able to Gift Aid their items there and then, without charities having to write to them to tell them how much the item was sold for.


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