The government has ruled out increasing the level of Gift Aid charities should receive to address a drop in income caused by the Covid-19 pandemic.

Last week a coalition of charities and voluntary sector organisations called on the government to temporarily increase the Gift Aid level that can be claimed on donations.

An increase of a third for every eligible donation could earn the sector an extra £450m, according to the group that includes the National Council for Voluntary Organisations, Cancer Research UK and the Charities Aid Foundation.

But in response to a parliamentary written question from the Scottish National Party’s shadow public health spokesman Martyn Day, the government has ruled out any increases and said instead it wanted to focus on improving take up of Gift Aid among charities.

Department for Digital, Culture, Media and Sport minister John Whittingdale said that less than a fifth of UK charities claim Gift Aid so any increase would only help a “small proportion of charities”.

“Gift Aid already results in full tax relief on the tax paid on donations, with basic rate relief being claimed by the charity and higher rate relief being claimed by the taxpayer where relevant,” said Whittingdale.

“Increasing the rate at which Gift Aid is paid would break the link with the basic rate of income tax paid on qualifying donations.

“Additionally, less than 20% of UK charities claim Gift Aid, so any increased payments linked to this tax relief would only benefit a small proportion of charities, with most being paid to a very small number of the very largest charities.

He added: “There is ongoing work between the Government and charities to improve eligible Gift Aid take-up and ensure that Gift Aid is fit for the future, and we understand the need to raise awareness among charities and donors of the benefits of Gift Aid.”

This latest response from the government follows Chancellor Rishi Sunak’s summer statement, which overlooked any changes to Gift Aid, instead favouring incentives to revive the hospitality sector.

Commenting on Sunak’s statement, Sir John Low, CAF chief executive said: “We continue to urge the Treasury to consider the proposal to increase Gift Aid so that charities can play their part in rebuilding our economy.

“Just as we need the hospitality sector to survive, people across the UK need charities to still be there as we emerge from this crisis.

“Charities are integral to the UK’s recovery and are at the heart of our communities, and indeed together they currently employ more than 900,000 people in the UK.”
ENDS

Sir John Low, Chief Executive of the Charities Aid Foundation, said: “We continue to urge the Treasury to consider the proposal to increase Gift Aid so that charities can play their part in rebuilding our economy.

“Just as we need the hospitality sector to survive, people across the UK need charities to still be there as we emerge from this crisis.

“Charities are integral to the UK’s recovery and are at the heart of our communities, and indeed together they currently employ more than 900,000 people in the UK.”

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