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Gift Aid

Volume 475: debated on Tuesday 6 May 2008

To ask the Chancellor of the Exchequer what assessment he has made of the effect on charities of the change in the Gift Aid rate which entered into force on 6 April 2008. (202879)

The precise impact on charities will depend on the behavioural reactions of donors and charities to the recent changes. Gross Gift Aid donations to charities are currently expected to increase year on year and were expected to do so even without the Budget 2008 announcements.

The Budget 2008 announcement of a transitional relief enabling Gift Aid to be paid at a transitional rate for 2008-09, 2009-10 and 2010-11 donations, will offset the effect on Gift Aid of the fall in the basic rate of income tax over the next three years. The estimated financial impact of this is published in table A.1 of the HMT 2008 Financial Statement and Budget Report at:

http://www.hm-treasury.gov.uk/media/2/5/bud08_chaptera.pdf

Budget 2008 also announced a package of measures aimed at driving up Gift Aid including major reform to the auditing process; a programme for bringing more smaller charities into Gift Aid; redesign of guidance and outreach to 5,000 new charities through the launch of targeted marketing tools.