Treasury stands firm against Gift Aid demands

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The Treasury has told TaxZone that "there are no current plans" to relax the Gift Aid tax relief rules, despite growing pressure for change in the wake of the tsunami disaster.

The Inland Revenue said earlier this week that it could not allow tax relief where a taxpayer entitled to use Gift Aid omitted to tick a box to indicate that he or she wished to do so. However, Gift Aid could be applied after a gift was made.

The Scotsman called on Wednesday for full tax relief to be allocated on all donations to the Asian disaster funds, "regardless of what the bureaucratic rules say".

Now, the Low Incomes Tax Reform Group (LITRG) has renewed its call for the Government to extend the scheme to non-taxpayers, who are "no less generous in their giving than those on higher incomes - and quite possibly m...

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08th Jan 2005 11:05

Wrong in principle

These demands by the LITRG are all very well when the charity is one that everyone supports.

But that is not always, or even often, the case.

For example, many people will not donate to Oxfam because of its left-wing prejudices; others will not donate to the National Trust because of its policy on fox-hunting on its land; yet others will not donate to charities that are public schools or private hospitals because they object to private education and healthcare.

However much you may disagree with them, these people are entitled to have respect shown for their views. That requires that no one else should be entitled to direct that taxes they have paid out of their income should be donated to a charity that they object to.

But that would be precisely the effect of the LITRG's demand. A non-taxpayer could make a donation to, for example, Eton College and thereby require taxes paid by other people to be repaid to that charity (if it is one).

That clearly is wrong in principle. The LITRG should recognise this and withdraw its demand.

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08th Jan 2005 14:37

Further guidance
The Disasters Emergency Committee now has a series of FAQs on its website, including several questions on Gift Aid.

The Inland Revenue posted the following item on its website late on Friday, 7 January:

What To Do If You Forgot To Claim Gift Aid
"If you are a UK taxpayer, using Gift Aid means your donation gets a 'top up' from the Inland Revenue increasing its value to the charity by over a quarter.

"A donation of £10 can be worth £12.82 to the charity or relief agency so it's very important that if you are a UK taxpayer you tick the Gift Aid box on the form, tell the phone operator when you make your donation that you want Gift Aid to apply to your donation, or if donating on-line tick the box on the website.

"In addition Gift Aid can be claimed retrospectively so if you have donated already but didn't use Gift Aid, your charity needn't lose out. You should contact your chosen charity to find out how they would wish you to provide a Gift Aid authorisation.

"Anybody who has donated to the Disasters Emergency Committee for the Tsunami Earthquake Appeal and believes they may have omitted to use Gift Aid, please write requesting a Gift Aid declaration, to the following address stating your name, full postal address including postcode. Also please state how you donated (i.e. over the telephone, by post, through a newspaper etc.)

Disasters Emergency Committee
PO Box 2710

"But please remember to ask for Gift Aid to apply at the time you donate."

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11th Jan 2005 08:39

Yes, exactly
To the extent low-income donors do not pay tax, they should not be entitled to direct that tax paid by other people should be paid to a charity.

This is because some, or even all, of the individuals who have paid that tax may object to that charity.

Those individuals are entitled to have respect shown for their views. This requires that no one else should be entitled to direct that taxes they have paid out of their income should be be paid to a charity they object to.

It is fine to be charitable with your own money and tax, but not with other people's.

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