CAF logo

CAF Policy Team

A champion for charities

Charities Aid Foundation

Please share

We can make Gift Aid go further – here is how

CAF responds to Treasury Committee inquiry: “Tax after coronavirus” and makes representation to the Comprehensive Spending Review

1 October 2020

In this time of unprecedented uncertainty and instability, civil society continues to do vital work across society. It is at the heart of community responses to the crisis: helping the most vulnerable to withstand the impacts of the pandemic; releasing pressure on our public services; continuing to provide vital support, and connecting people and communities across the country.

But many charities are struggling enormously in the face of a “double hit” - as their income drops due to cancelled fundraising activities, closure of charity shops and changes to funders’ activities; whilst at the same time demand for their services increases due to the impact of Covid-19 on their beneficiaries. Social distancing and other measures are also forcing changes in operations and resulting in increased costs. CAF’s charity polling three months into lockdown found that demand for charity services was still increasing, and that half of those surveyed were reporting that they would not survive more than a year without further support.

The initial £750m charity support package, and the broader furlough scheme (which has now been replaced by the job support scheme), were both welcomed and will help charities. However, the gap between support provided and  need remains vast (with a potential £10.1bn funding gap for the sector opening up for the second half of 2020). And while direct Government stimulus will be crucial, the importance of philanthropy and giving as additional sources of longer-term support for civil society in a post-Covid-19 world cannot be underestimated.

National Deaf Children's Society

We have therefore responded to the Treasury Committee’s inquiry on ‘Tax after coronavirus’ and made a representation to the Comprehensive Spending Review (which sets departments’ budgets for the years 2021/22 to 2023/24) highlighting the importance of the tax system  in supporting and facilitating giving.

While this year’s budget has been replaced by the Winter Economy Pan, both consultations provide an opportunity for the Government to listen to the voluntary sector and make the changes needed to ensure that it can fully contribute to the recovery from the pandemic while supporting ambitions to “build back better” and “level-up”.

Why Gift Aid – and what are we proposing?

In particular the existing Gift Aid scheme provides a simple way for the Government to offer additional support for the charity sector at this unprecedented time by helping to maximise the value of donations made by people around the country to the organisations and causes of their choice.

Recent sector research shows that charities surveyed are on average having to plan for a 24% loss to their total income for the year ahead. A coalition of leading voices in the UK charity sector (including CAF) have called on the Government to temporarily increase the level of Gift Aid that can be claimed on donations. A Gift Aid Emergency Relief Package would go some way to keeping charity services running and could enable many charities that might have had to shut their doors to get through the crisis.

The proposed Gift Aid change would mean that a £100 donation from a UK taxpayer would increase to £133.33 (from £125) for the charity once Gift Aid has been claimed. Raising Gift Aid from one-quarter to one-third on donations in this way could  potentially secure an extra £450m for good causes  and benefit over 70,000 charities as they return to fundraising activities and re-open charity shops over time.

A temporary increase in the rate at which Gift Aid is paid represents a simple, practical means of ensuring that more money gets to charities at this vital time, and one that has clear precedent in the recent past (in the form of the 2008 Gift Aid Transitional Relief scheme). Furthermore, this would  utilise existing distribution methods as it would, in effect, act as a match for individual giving. It could also act as a powerful tool for further fundraising which could bring in even more money for charities.
Sue Ryder

Sign up, share it on social, and write to your MP

Over 400 charities have already joined our campaign and we have urged the Treasury Committee to support this important temporary relief package, which would increase the value of individual giving and hopefully incentivise more people to donate.

Gift Aid Awareness Day is on the 8th October – a  great opportunity to talk about the campaign and gather even more support.

For more information on the proposal including a detailed briefing visit the campaign website for the Gift Aid Emergency Relief Package.

Join our campaign now and receive the supporter pack which provides you with lots of resources to spread the word on social media, inform yourlocal press and talk to your MP about the campaign.

Related Content

gift aid emergency relief package

Gift Aid Emergency Relief

We are campaigning to help charity supporters give more, and to better support our amazing charities meet the challenges of the COVID-19 crisis.

Join the campaign
young woman mask covid-19 2020

A Covid-19 philanthropy stimulus package

Unlocking further giving in the UK to support civil society at a time of crisis.

Read our briefing paper
caf uk giving coronavirus briefing 380 220

Covid-19 and charitable giving insight hub

During the crisis CAF's research team has been monitoring public reactions to charitable giving as well as talking to charities about their concerns.

Read our insight