Gordon Brown and Alistair Darling deal budget blow to charities

image: Square to Square 2008 logo

As Alistair Darling, Chancellor of the Exchequer, delivers his first budget in March 2008, Gordon Brown's blow to UK Charities is only weeks away.

As Alistair Darling, Chancellor of the Exchequer, delivers his Budget 2008, Gordon Brown's blow to UK Charities is only weeks away with a change to the Gift Aid scheme.

Gordon Brown, now UK Prime Minister, changed the rate at which UK registered charities can claim back Gift Aid, via the Inland Revenue, from 28 pence per pound to 25 pence per pound.  The change is due to take place in April 2008.

Gift Aid, introduced in 2000, allows UK registered charities to claim from individuals, who pay income tax and/or capital gains tax themselves to cover the amount of tax the charity will relaim from the donation, 28 pence in the pound; this is at no cost to the person donating.

So for example an individual, who qualifies as a Gift Aid donator, who donates £100, the charity can get £28 pounds from the Government via the Inland Revenue (HM Revenue & Customs), making the total donation of £128 to the charity concerned.

Obviously, the change in rate that can be claimed will have a substantial effect on the funds available to charities, like the Wessex Cancer Trust.

However, the little known or publicised changes made by the Prime Minister, Chanceqllor of the Exchequer, HM Treasury and the current Labour Party Government, means that many charities will see a substantial drop in the funds they receive as a result of donations, where Gift Aid is claimed, following the declaration from the donator.

Shame on you Gordon Brown, Alistair Darling and the Labour Party!

 

Summary of the Gift Aid scheme

source: http://www.hmrc.gov.uk/charities/gift-aid.htm

Gift aid – an overview

Gift aid is tax relief on money donated to UK charities.

We treat donations as if the donor had already deducted basic rate tax from them. The charity can then reclaim this tax to increase the value of a donation.


Gift aid rules

Donors must

* pay enough UK income tax and/or capital gains tax themselves to cover the amount of tax the charity will reclaim
* give the charity a gift aid declaration, which should include
- their name
- their home address
- the charity’s name
- details of the donation – saying that it is a gift aid donation
- confirmation that they have paid UK tax – to cover the tax the charity will reclaim.

A declaration can be made to cover individual donations,a series of donations, can cover donations made during a specified period or to cover all future donations. They can also be backdated for up to 6 years prior to the date of the declaration provided the donation was made since 6 April 2000.
Tax relief

If a customer pays the

* basic rate of tax, they cannot claim further tax relief on the payments
* higher rate of tax, they can claim higher rate relief on the payments by entering the donations in the gift aid box on their self assessment tax return. Customer's who receive a form P810 can declare their gift aid payments on it.

 

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