By David Owens
Hawsons Chartered Accountants
RESEARCH from HMRC has indicated that, due to a lack of awareness surrounding the Gift Aid scheme, charities are missing out on £560 million of Gift Aid every year.
Gift Aid allows charities to claim an extra 25p for every £1 donated to them by eligible UK tax payers. The scheme accounts for approximately £1.3 billion in charitable income every single year.
The research from HMRC, which was completed in September 2016, but subsequently published in March 2018, reports that Gift Aid is not claimed for around a third of eligible charities. The report highlights that a lack of awareness, from both the public and charities themselves as the main reason for the funds not being claimed.
The report also highlighted that approximately 30 per cent of donors who responded to the survey said they had a ‘fairly poor’ understanding of Gift Aid, with a further 11 per cent stating that their understanding was ‘poor’. Alongside the £560 million that remains unclaimed, £179 million per year is being claimed erroneously.
In response to these figures, the government committed itself to supporting Gift Aid awareness initiatives, including communications with 50,000 small charities to help raise awareness and understanding of the Gift Aid Small Donations Scheme. The GASD scheme allows charities to claim relief similar to Gift Aid on cash donations of up to £8,000 each year, without individual paperwork. This can be hugely beneficial to charities, as research shows that around 80 per cent of people mainly donate to charity through collection tins and buckets.
For more information, contact Hawsons Chartered Accountants on 01604 645600 or visit the website www.hawsons.co.uk