Banking News Sooner Rather Than Later For Gift Aid Donations 1219

Sooner rather than later for Gift Aid donations

06 March 2008 / by Joy Tibbs
As charities stand to lose £90 million of Gift Aid each year when a new lower rate of income tax is introduced on April 6, charity donors are being encouraged to make donations before the cut-off point.

The new income tax level will drop to 20 pence per pound when the budget is implemented, which will have a significant impact on charity finances. According to the Charities Aid Foundation (CAF), this £90 million would pay for vaccinations to protect 18 million children from childhood diseases, enable 3,205 elderly people to live in a care home for a year, or pay for 1.3 million hearing aids.

Chief Executive, John Low, says: “It is good news for individuals that income tax is dropping but there will be millions and millions less for charities to claim back.

He is urging people thinking of making large charity donations to do so as soon as possible rather than waiting until the lower rate is in force. “Every pound counts, particularly as we fear that this will be a hard year for charities anyway due to the economy slowing,” he says.

“If you are a UK taxpayer and are planning to make a one-off donation it would be best for your charity if you give before April 6.”

Age Concern is one of 190,000 UK-registered charities. “We stand to lose £40,000 next year alone,” comments its director general, Gordon Lishman,

“This is money we will have to find from somewhere else if we are to continue all our work to fight for a better deal for the most vulnerable older people in the country. One-off donations before the end of the financial year to help us make up the shortfall would be extremely welcome.”

Launched in 1990, Gift Aid is a Government scheme which allows charities to claim back income tax paid on one-off donations. The current rate is 28 per cent, but this will drop to 25 per cent next month.

© Fair Investment Company Ltd

Written by Editorial Team