The Future of Gift Aid project steering group, co-ordinated by CTG, has written to the Exchequer Secretary to the Treasury requesting continued investment from the Government in the project.

The Minister has now responded: “Thank you for presenting your proposals to HMRC at an official level and taking the time to set them out to me as a budget representation. The Chancellor will take these into consideration as part of the budget policy development.”

Future of Gift Aid Budget Representation – 3 October 2022

XST – CTG 10/22

The CTG letter noted:

The Government is committed to building a trusted, modern tax administration system that recognises that “the laws governing tax administration need to change to allow HMRC to deliver world leading services and support taxpayers better as they interact with HMRC digitally”.

In advance of the next Budget, we call on the Government to help that aspiration become a reality by investing in the Future of Gift Aid project to help ensure the relief is fit for the digital age.

Gift Aid is worth £1.34bn a year to charities. Donors are incentivised to give to causes for the public good. The scheme supports the principle that taxpayers should not be taxed on money that they do not benefit from personally.

The Gift Aid system is now over twenty years old and was designed at a time when modern means of payment were not available or even imaginable. The Future of Gift Aid project advocates a modern Gift Aid system. This would help reduce the £180m of Gift Aid claimed in error and help to unlock more than £560m of Gift Aid that goes unclaimed each year. From the outset this has been a collaborative project involving a wide range of stakeholders including HMRC. There are benefits for all.

The value of the Future of Gift Aid project has been recognised by The Office of Tax Simplification in maximising the use of third-party data and credits. The progress made is promising. But if Gift Aid is to be truly fit for the digital future there will also need to be legislative changes. Embracing innovation and the benefits of technology can be a game-changer in terms of Gift Aid practice. It is unrealistic to think that existing legislation can cope with the new opportunities.

In line with the time frame for the Government’s plans for the transformation of the tax system there needs to be a roadmap which recognises the lead time required to (a) update both HMRC and charity/intermediary systems and (b) to utilise the opportunities provided by new technology and payment methods.

Our proposals have already been presented to HMRC and details of the project can be found in the appendix.

We would be happy to provide any additional information you require.

We are excited by what could be achieved and would welcome your active involvement in the project.