Posted on 22nd April 2009
A third of UK adults are not aware they can give to charity tax efficiently, according to a report from the Charities Aid Foundation (CAF).
Only 29% of respondents could name Gift Aid, while 7% named payroll giving and only 1% could name legacies as a means of tax efficient giving, the report 'The Public Bond with Tax Effective Giving in the UK' said. However, higher-rate taxpayers are around twice as likely to be aware of, and twice as likely to have used, Gift Aid to give tax efficiently.
“Despite a concerted effort by governments, fundraisers and intermediaries this report reveals a gulf in public awareness and understanding of tax-effective giving”, said John Low, chief executive of CAF. “There is significant scope for further improvements to and promotion of tax-effective giving.”
Gift Aid was worth around £900m to charities in 2008 and 98% of Gift Aid users are positive about the experience, but £752m goes unclaimed every year and only 40% of those who are aware of Gift Aid but haven’t used it have a positive view of the scheme.
A previous CAF survey of higher-rate taxpayers incorporated into the report shows that half of higher rate taxpayers are unaware that they can reclaim 20% personal tax relief on their charitable donations in their self assessment tax return. Although 52% initially said they were likely to give their tax relief directly to charity, only 24% said they would when the process was explained.
The report makes a number of recommendations including:
- Collaboration between Government and the third sector to raise awareness of Gift Aid through campaigns
- Simplification of Gift Aid that avoids any unintended negative impact that could result from removing tax relief for the donor
- The introduction of additional tax-reliefs on charitable giving such as Lifetime Legacies
The full report is available on the CAF website.
