Recent research carried out by HMRC in July 2014 has shown that the general public’s understanding of how Gift Aid works in practice leaves room for improvement. Many donors seldom make the link between the tax they have paid and the Gift Aid claimed by the charity. There is even an incorrect view by some that Gift Aid is an additional tax or donation. The end result is fewer donors being willing to claim the relief so charities receive less money. Increasing Gift Aid is viewed as a government priority and The National Audit Office (NAO) estimates there are donations of around £2.3 billion where Gift Aid is not used. Though not all of these donations will be eligible for Gift Aid, this does indicate substantial sums of money which could potentially benefit charities are otherwise lost.
Following this, on 17 November 2014 the government announced that the model Gift Aid declaration forms produced by HMRC will be simplified and improved in order to help donors understand the Gift Aid scheme better. The hope is that this will then boost the number of eligible donations.
The model declaration forms are used by a large number of charities – mainly the smaller ones. Changes will entail:-
- Making the language used about Gift Aid more straightforward to help donors to decide if their donations qualify for relief.
- Avoiding excess detail or dense formatting.
- Breaking up the information so that it is easier to digest.
- Changing the layout significantly so donors pay more attention to the information.
For information regarding Gift Aid or any Private Client issue in general, please click here.
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