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Gift Aid reform for charities

Comment 1st July 2010

Gift Aid helped to transform voluntary giving. By replacing the legalistic Deed of Covenant system, it enabled millions more people to give donations to charity that were tax efficient and brought millions of more pounds into charities.

However, it is still an administrative headache for charities to operate and they still miss out on thousands of potential Gift Aided donations from people who, for whatever reason, fail to make a Gift Aid declaration.

Also, Gift Aid currently misses out the extra income that could come in from higher tax rate payers.

I propose two things, neither new, but both still waiting to be implemented:

1. That Gift Aid becomes an "opt out" system, rather than opt in. This will increase Gift Aid revenue for charities and make administering Gift Aid far simpler, thereby reducing charities' costs.

2. Charities can claim the Gift Aid for the higher rates, as well as the basic.

Why does this matter?

In the Big Society, the Third Sector are being expected to take on more significant roles, yet they are being squeezed financially by the recession, expected cuts in funding from Government (local, regional and national).

By making these two simple changes to Gift Aid legislation, we can increase charity income and reduce the administrative burden for them in recording and claiming Gift Aid.

Two simple solutions that will have significant impacts, allowing charities to devote more time to doing what they were set up to do and serve their communities.

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