Reprieve Over Gift Aid Worth £90m A Year
Britain’s 190,000 registered charities were thrown a £90m-a-year lifeline thanks to the chancellor’s last-minute decision to maintain current rates of tax relief on Gift Aid donations.
These will be maintained for at least the next three years, instead of being cut in line with the new lower basic rate of tax.
Gift Aid boosts charitable donations because the government adds back the basic rate of income tax paid by donors.
Charities had braced themselves for a loss in revenue. With a 22% rate, each £100 donated becomes £128, but with a 20% rate, £100 becomes £125.
The chancellor says charities can claim “transitional relief” for three years, allowing them to retain the 22% relief rate.
John Low, chief executive of the Charities Aid Foundation, which helps individuals donate in a tax-efficient way, said: “This is fantastic news for charities. It is a huge relief as we feared charities were going to lose in excess of £90m a year when the basic rate of tax comes down next month.
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