Charities are losing 359 million through donors' tax inefficiency
UK charities are losing out on more than 359 million a year by those giving to good causes not doing so tax efficiently reveals research* from IFA Promotion, the organisation promoting the benefits of independent financial advice.
These figures are the latest from IFAPs annual TaxAction campaign, which looks at the total amount we needlessly gift to the taxman each year. The report reveals that last year alone 26.3million Brits generously gave nearly 7.1bn to their chosen charities. Of this total a staggering 359 million could have been saved from the tax mans pockets, 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 5.2 million Brits donated a total of 2 billion using these three methods alone. However despite over 15 million donors being taxpayers, a staggering four in five employees who donated more then 5 a year to charity, did not do so via the payroll giving scheme, and as a result UK charities missed out on an additional 106 million.
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, allow employees to give regular deductions direct from their salaries.
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 April 2005, a gift of 10 through the pay packet will be worth 11 to charity.
David Elms, Chief Executive of IFA Promotion commented, "It is important that our good intentions dont go to waste when giving to charity. By ensuring we use the various tax efficient ways of donation, we can start to chip away at the mountain of wasted tax the
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David Elms Liz Willder/ Sarah Whelband
Chief Executive Lansons Communications
IFA Promotion 020 7490 8828
020 7833 3131
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IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents over 10,000 firms of independent financial advisers across the
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