Budget 2008 announcements

On budget day (12 March 2008) the Chancellor made a number of announcements affecting charities

Gift Aid Transitional relief

For donations made by donors on or after 6 April 2008, charities will claim Gift Aid repayments at the new basic tax rate of 20 per cent but they will also be entitled to a transitional relief worth 3p for every £1 donation they receive under the Gift Aid scheme. This transitional relief has been provided by Government to allow charities to adjust to the fall in basic rate tax from 22 per cent to 20 per cent, and will be paid in respect of all qualifying Gift Aid donations made to charities between 6 April 2008 and 5 April 2011. This means that for every pound donated under the Gift Aid scheme the charity will continue to receive 28p. Charities don’t have to do anything extra to benefit from this transitional relief; HMRC will pay it automatically along with Gift Aid tax repayments.

Please see the following information:

• Budget 2008 – Gift Aid Transitional Relief (PDF 67K)
• Transitional Relief Frequently Asked Questions

Gift Aid – Administrative changes and proposals

A number of changes are being made to HMRC’s Gift Aid audit processes for charities, and our guidance for charities will be improved over the next few months. The changes are aimed at reducing administrative burdens and encouraging greater use of the Gift Aid scheme.  You can find out more from Gift Aid Administrative Changes and Proposals (PDF 70K).

Other initiatives for charities

Government has announced a number of other initiatives to support charities, including training opportunities for smaller charities, a Gift Aid mentoring forum and further guidance on tax effective giving. You can find out more via the newly launched DirectGov Gift Aid web information service.