Charities losing 691 million through donors' tax inefficiency
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UK charities lost out on more than 691 million last year - 332 million more than the previous year, by those giving to good causes not doing so tax efficiently reveals research* from IFA Promotion (IFAP), the organisation promoting the benefits of independent financial advice.
These figures are the latest from IFAP’s annual TaxAction campaign, which looks at the total amount we needlessly gift to the taxman each year. The report reveals that last year alone 48.8 million Brits generously gave over 8 billion** to their chosen charities, an increase of over 1 billion on the previous year (largely due to donations to the Asian tsunami appeal). However, of this total a staggering 691 million could have been re-cooped, and distributed among these good causes, if donors had made the most of the tax allowances available.
The three most tax effective ways of donating are through Covenant, Gift Aid and Payroll Giving. Last year, of the total number of Brits who gave to charity, more than 8 million donated a total of 3 billion using these three methods alone. However, despite over 24 million donors being taxpayers, four in five employees who donated more than 5 a year to charity, did not do so via the payroll giving scheme, and as a result
There is a four year minimum limit on Covenants to charities for any amount. However, one-off donations of any amount can be made via Gift Aid. The Payroll scheme set up by some companies, allows employees to authorise their employers to deduct charitable donations direct from their salaries.
David Elms, Chief Executive of IFA Promotion commented, “As our donations to charity have increased so vastly in the last year, it is more important than ever that our good intentions don’t go to waste. By ensuring we use the various tax-efficient ways of donation, we can start to chip away at the growing mountain of wasted tax that
-ends-
David Elms Chloe Mann/Holly Godden
Chief Executive Lansons Communications
IFA Promotion 020 7294 3681/3674
020 7833 3131
* IFA Promotion’s TaxAction 2005 report: produced for IFA Promotion by RAKM, February 2005
** National Council for Voluntary Organisations: Charitable giving 2003/2004
For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on 020 7294 3682 or search online in ‘Media Services’ at www.unbiased.co.uk
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