Charities miss out on 550 million through donors' tax-inefficiency
"Ensure your chosen charity gets the lion's share," says IFA Promotion
Britain's charities are missing out on a 550 million bonanza this year because consumers are not making the best use of tax-efficient ways of donating, says IFA Promotion, the organisation promoting the benefits of independent financial advice.
The figures, revealed as part of IFA Promotion's TaxAction 2001 campaign, show that just 1.8 billion was donated via Covenant, Gift Aid and Payroll Giving; the three most tax-efficient methods of giving.
Over 26 million Britons (56.3% of the adult population) gave to charity in 1999/2000. Of these, around 15 million are taxpayers, yet just 760,000 employees donated a mere 37 million via the Payroll Giving scheme. IFA Promotion's conservative calculations reveal that if just one in five employees who donate more than 5 per year to charity did so by means of tax-efficient payroll giving, charities would be in for an additional annual windfall of 134 million.
Covenants to charities must be made for at least four years but can be for any amount. One-off donations of any amount can be made via Gift Aid and regular deductions from salaries can be made by those whose employers operate a Payroll Giving scheme, which now allows any amount to be deducted from an individual's salary, with the Revenue giving a further 10% supplement on each donation until March 2003. A 10 gift to charity costs a basic rate taxpayer only 7.80; and, with a ten per cent supplement on all Payroll Giving donations until March 2003, a gift of 10 through the pay packet will be worth 11 to charity.
David Elms of IFA Promotion commented, "Whilst people will always want to slip a few coins into a collecting tin or sponsor a fund-raising event, their chosen charities will benefit far more by donations made tax-efficiently. We are urging people to give what they can but want them to ensure the taxman does the same on their behalf!"
He concluded, "It's easy to arrange and you don't have to give a large amount. The message is simple - talking to an independent financial adviser can help you make your donations go further for the charity of your choice."
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For further information please contact:
| David Elms Chief Executive IFA Promotion 020 7833 3131 | or | Richard Winder/ Liz Willder Lansons Communications 020 7490 8828 |
Notes to Editors
1. Independent Financial Adviser Promotion
Independent Financial Adviser Promotion Ltd. was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents nearly 10,000 firms of independent financial advisers across the UK and is sponsored by 32 leading financial institutions.
IFA Promotion's central belief is:
"Consumers have a right to financial advice that is independent of the providers of financial products - i.e. independent financial advice."
Furthermore independent financial advice should be:
- Affordable. The option to take independent financial advice should be available, by right, to all - not just the wealthiest in society
- Convenient. IFAs should be available in the location of the consumer's choice, wherever they live in the UK.
- Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.
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