Cancer Research UK takes the lead on Gift Aid reform | Wednesday 10th March 2010

Cancer Research UK takes the lead on Gift Aid reform

By David Ainsworth, Third Sector, 23 Feb 2010

Cancer Research UK is pushing for a consensus in the sector in favour of a 30p composite rate for Gift Aid, one of the reform options researched last year by the Treasury.

The UK's largest charity by fundraising income said it had received positive responses when it recently sounded out two dozen other charities about the idea. It is now thinking of writing to a wider range of organisations to seek further support.

The 30p composite rate would allow charities to claim a 30p rebate on every £1 donated by taxpayers. Higher-rate taxpayers would no longer be able to claim any personal tax relief on their donations.

So far, sector representative bodies have been unable to agree on a preference from a range of possible Gift Aid reforms. The Government has expressed frustration that the sector has not adopted a collective position.

Sarah Woolnough, head of policy at CRUK, said the sector needed to present a united front. "The Treasury has said it will be difficult to reform until the sector speaks with one voice," she said. "We felt we could help in getting the sector to do that.

"We did some modelling and decided that the composite rate was a good option, with the added advantage of being cost-neutral for the Treasury.

"We've received positive responses from some of the charities we've approached. No one has said they don't like it. We'll approach more organisations and, if that goes well, we'll put this to the umbrella bodies, whose job it is to lobby for reform."

Richard Bray, regulatory and taxes manager at CRUK, said charities that relied on a small number of large donors might be opposed to the composite rate because it would be a worse deal for higher-rate taxpayers.

"We're proposing that donations over £10,000 could still be made using the existing model," he said. "This would protect donors who see the tax break as a big incentive."

Louise Richards, director of policy at the Institute of Fundraising, said the institute would welcome a united stance in the sector.

"There have been differences of opinion among sector bodies about the best option to choose," she said. "This is a helpful proposal."