Following a lengthy consultation process (The Government received 98 written and 257 online responses plus approximately 300 sector representatives attended consultation events)  and energetic lobbying from the key bodies in the sector – especially the Institute - the Chancellor has announced the implementation of measures aimed at increasing the long-term take-up of Gift Aid and streamlining processes for many charities.

The Government announced a universal de minimus 4% error rate  and a raft of measures aimed specifically at small charities with under £1m turnover, providing simplification of the process burden, along with training and mentoring, and standardised tools and guidance. On top of this de minimus 4% error rate, charities have up to 60 days after the initial audit visit to rectify any invalid or missing declarations found first time around . For charities who claim up to £2,500 per year, if there is a 4% error rate or less then no repayments will need to be made. This should benefit thousands of smaller organisations 

A self certification scheme has been announced for larger charities but clarification of how this will work is still being sought. There was also an initiative to extend the Tax-effective Giving Initiative to build on the Institute’s vast experience in this area. 

So all in all perhaps its what we expected. None of the big radical changes some might have wished for but wide-ranging change that benefits thousands of donors, charities and the causes that they serve. And although this represents significant progress in the area of Gift Aid I feel there is still much opportunity to increase the amount of monies rightfully claimed by the sector on donations by UK taxpayers. Blackbaud remains firmly committed to furthering that cause by facilitating knowledge and events, promoting the exchange of views with HMRC and providing products and services that both protect and preserve the sector’s income in this area and the reputation of Charities receiving donations from their supporters.

The Institute of Fundraising has published a paper on ‘Gift Aid, the change in Basic Tax and Transitional Relief’ - click here for more details. They are also running a survey to obtain feedback from organisations about tax effective giving. You can take part in the survey by clicking on this link.