In the right direction but lack of commitment on Gift Aid reform a disappointment, says CFDG

3rd December 2010

Charity Finance Directors’ Group welcomes the formation of a new HMRC working group, but is disappointed that the Government has failed to commit to any standardisation or simplification reforms or a deadline for delivery.

In October 2010 CFDG prepared a letter to the Economic Secretary to the Treasury, Justine Greening, which was subsequently signed by seven other members of the Gift Aid Forum, including National Council for Voluntary Organisations (NCVO), Charities Aid Foundation (CAF), Charity Tax Group (CTG) and the Institute of Fundraising (IoF).  This letter set out a clear timeline for those reform options which could be agreed by the sector.  These reforms were proposed in order to bring real long-term change to the Gift Aid process, improving uptake and preparing the system for new developments in philanthropy and technology. 

Megan McInally, CFDG Policy Manager said, “We wanted to make it clear that the Gift Aid system is not in need of a complete overhaul, but that reforms to modernise the system are essential in order to enable charities and donors to maximise the impact it can have.” 

The Gift Aid Simplification Survey, conducted by CFDG alongside other sector bodies in June 2010, highlighted that many charities do not maximise their potential income through Gift Aid and that too many Gift Aid claims are left unmade.   Survey respondents (over 80%) expressed strong support for options such as online filing of Gift Aid claims, or a charity database, both of which would provide a simple but effective way of increasing uptake amongst charities long after transitional relief has ended.  

Megan McInally added “charities are currently facing an unprecedented financial environment in light of the budget cuts and the upcoming increase in VAT.  CFDG wants to support initiatives that enable charities to work more effectively and efficiently in their finances.  The priority needs to be enabling a simple and modern Gift Aid system that can help charities develop a sustainable financial future.” 

Expressing a degree of disappointment regarding the Government response Megan continued “we are moving in the right direction but the Government have missed an opportunity to send out a real positive message today by making a commitment to make some of the legislative and administrative changes necessary for allowing online filing and the use of a Gift Aid database.”

- Ends -

Notes to Editors:

1.CFDG is the charity that promotes best practice in charity finance management, supporting finance managers with conferences, training and a wealth of web-based information.  CFDG is also active in the policy arena, working on issues that affect charity finances.

2.CFDG’s circa 1700 members are responsible for the finances of charities with a wide variety of income levels. Between them our members manage some £17.4 billion in charity income per year, around half of the sector’s income.

3.If you would like to discuss any of these issues further please contact policy@cfdg.org.uk or 0207 2508347

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