BORDERS MP CALLS FOR REVIEW OF 'GIFT AID' SCHEME IN LIGHT OF RECENT CHARITY FUNDING SCARE

11.11.14am BST (GMT +0100) Fri 4th Apr 2008

Borders MP Michael Moore is calling upon the Government to carry out a review of the 'Gift Aid' scheme, which allows charities to boost their income by reclaiming the tax on donations. His call follows the recent charity funding scare, when it was estimated that the forthcoming cut in the basic rate of income tax would have cut charitable income by as much as £90 million.

From 5 April 2008, the basic rate of income tax will fall from 22% to 20%. As a result of this cut, the amount that charities can claim back would have fallen from 28 pence in the pound to 25 pence in the pound, causing a drastic reduction in the overall amount received by charities. Cancer Research UK estimated that their income alone would be cut by £3 million.

After intense lobbying by campaigners and MPs, including Mr Moore, the Chancellor recently announced that, despite the basic rate of tax changing, the gift aid rate will remain the same for the next 3 years as a transitional arrangement. While welcoming this announcement, Michael Moore highlighted the need for a permanent solution.

He said:

"I am pleased that the Chancellor has reacted to the pressure that has been brought to bear by delaying this cut in gift aid. Charities in the Borders were extremely concerned at the impending cut and what this would have meant for the delivery of their services.

"However, merely postponing this cut is not good enough. Charities do not want to find themselves in this situation again, where they are left wondering how on earth they will meet a short-fall in their income.

"In the current economic climate, with people feeling the pinch as food and fuel prices rise and mortgage deals become less competitive, it is extremely difficult for charities to maintain their levels of fundraising. The last thing they need is to face a cut in gift aid. The Government should review the entire Gift Aid scheme to make it simpler, and should bring in safeguards to prevent this damaging situation arising in the future."