HISTORIC PRESS RELEASE : Charities are losing out on tax breaks [October 1999]

The press release issued by HM Treasury on 28 October 1999.

New research shows charities are losing out on tax benefits. Nearly 70 per cent of the UK population give to charity in a typical month but less than 10 per cent use the tax breaks for charitable giving.

The research published today looks into attitudes to giving to charity. It was carried out by the Inland Revenue, the Charities Aid Foundation and the National Council for Voluntary Organisations as part of the Government’s review of charity taxation.

Also published today was a summary of the 500 responses to the Government’s consultation document on how the tax system could do more to support charities.

Commenting, the Economic Secretary to the Treasury, Melanie Johnson said:

“The Government is committed to encouraging Britain to become a nation of givers. I believe that the tax system can do more to encourage greater giving to charity. But we need to make the tax incentives more attractive and up to date.

“We also need to raise awareness amongst donors, and the charities they support, about how they can benefit from those incentives. The research published today shows that there is still much to be done.”

Key findings show that only 43 per cent of the population are aware of the tax incentives for charitable giving. 13 per cent did not know how to use them and 11 per cent thought they would be too difficult to use.

There are issues for employers too. Less than 20 per cent said their employer offered a Payroll Giving scheme, even though giving through the pay packet is popular, especially with young people and those on lower incomes. Over 20 per cent of those whose employer did not offer this facility said they would give through their pay packet if they got the chance.

Turning to the Government’s current review of charities taxation, Miss Johnson said:

“I am very encouraged with the level and content of the responses to our consultation on modernising the charity taxation system and feel there is value in publishing a summary of the responses received. We will soon be announcing the changes to be made as a result of our review.”

The responses to the Government’s consultation document indicated a high level of consensus on key issues. There was strong support for proposals to encourage more people to give more to charity, including:

• reducing the maximum limit for Gift Aid donations to make the scheme accessible to more people;
• re-launching the Payroll Giving scheme with a promotional campaign.