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Inefficient giving costs charities nearly £1.2 billion

· UK adults give around £10bn each year to worthy causes, but gift nearly £1.2bn to the taxman

· Use Gift Aid and make your donations tax-efficient

UK charities will miss out on nearly £1.2 billion in donations this year as a result of tax-inefficient giving by generous donors.  Research* from Unbiased.co.uk, the professional advice website, shows that donors could be doing more to support charitable funds without wastefully allowing the taxman to claim nearly £1.2 billion that could be going towards good causes.

In 2007/08 UK adults gave a total of £9.9 billion to charity; however according to Unbiased.co.uk’s annual ‘TaxAction’ report (part of the campaign looking at the total amount we waste in tax each year) this amount could be bolstered by nearly 12.5% (i.e. nearly £1.2 billion), if donors had made the most of the tax allowances available to them. 

Consumers can tax efficiently donate to charity via Gift Aid.  Gift Aid is a form of opt-in tax relief on money donated to UK charities, whereby the charities can reclaim basic rate tax on a donation.

Karen Barrett, Chief Executive of Unbiased.co.uk, the professional advice website commented, “With almost 28 million Brits donating to charity in a typical month, UK taxpayers remain very generous with their donations.  It is unfortunate that not all donations are being made in a tax-efficient manner. Nearly £1.2 billion is going to the tax man when this could be easily avoided by making use of Gift Aid and other tax efficient methods.”

Payroll giving (Give as You Earn) is another tax efficient form of donating to charity.  This scheme allows employees to contribute a regular sum, taken out of their salary by their employers and given to the employees chosen charity.  According to the Charities Aid Foundation, the Exchequer could be forced to donate another £4billion to charities if all employees become members of payroll schemes.

Barrett continued, “Using the most tax-efficient methods of making donations ensures worthy causes get as much money as possible. Seeking advice from an independent financial adviser can help you to take control of your finances and plan your donations tax-efficiently. No matter how small or large your donations, by using the most tax effective way of making a donation it will ensure charities get the maximum benefit.”

To find a local independent financial adviser who can advise you on being tax efficient you can go to Unbiased.co.uk and use our ‘Find an IFA’ search.

ENDS

* TaxAction 2009 report produced for IFA Promotion by RAKM, based on a specially commissioned analysis of HMRC and a range of other official data sources.

** Charities Aid Foundation and National Council for Voluntary Organisations: UK Giving 2008: An overview of Charitable giving in the UK in 2007/2007, available at http://www.cafonline.org/pdf/UK%20Giving%202008.pdf

For further information on Unbiased.co.uk, the professional advice website pleases contact:

Sign up to Unbiased.co.uk’s unique Professional Connections service, allowing IFAs, mortgage brokers and solicitors to find and link up with other professional advisers across the UK to expand their current business network.

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Notes to Editors

Unbiased.co.uk, the professional advice website

Unbiased.co.uk is the free and confidential UK-wide search service matching consumers with the most appropriate local professional advisers for their needs.  In 2008, Unbiased.co.uk fulfilled over half a million searches for local, professional advice. 

The portal currently houses three professional advice searches: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is inviting accountants to sign up for its ‘find an accountant’ service.  These searches enable consumers to find relevant professional advisers by postcode, area of specialism and payment method, amongst other options. 

IFA Promotion, the organisation behind Unbiased.co.uk, is now in its 20th year, and was set up to promote the benefits of independent financial advice to the consumer. 

Unbiased.co.uk’s product provider sponsors

Registered Office: Unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606