Our policy on Gift Aid

Read our policy statement on Gift Aid here.

Gift Aid is a key income stream for Cancer Research UK. In 2009/10 we raised approximately £27 million from the scheme. This income could cover the cost of running ten laboratories within the Cancer Research UK London Research Institute for approximately three years. However, it is widely agreed that the system is complex and in need of reform. We are supportive of the Treasury's Gift Aid forum which is currently discussing the best way to simplify and reform the scheme. 

Following changes to the basic rate of income tax in 2006, the rate of Gift Aid awarded to charitable donations is currently given at 26 pence per pound for standard rate taxpayers. Cancer Research UK and our partners were instrumental in gaining transitional relief for charities for three years. This means that the basic rate of income tax remains at 20% but that the Government continues to pay Gift Aid at 22% in order to help charities prepare for the loss of income. Higher rate taxpayers are entitled to a rate of 40 pence in every pound. However, these individuals currently need to claim back this extra money themselves, which they may then donate to the charity at their discretion.

We would like the Government to simplify the process by which Gift Aid is given to charities by introducing a 'composite rate'. This would involve the abolition of higher rate relief in exchange for a new rate that all Gift Aid claims would be paid at. This rate would reflect the average tax rate of those giving under Gift Aid and would therefore fall somewhere between the basic and higher rates of income tax. We believe that such a scheme could be set at a level that is cost neutral to Government but that would result in an increase in income for the majority of charities.

Additionally, we would welcome a tiered Gift Aid system that recognises that some very wealthy higher rate taxpayers reclaim their higher rate tax as an incentive to give. Therefore we propose that donors who give gifts over a certain threshold, say, £10,000, should continue to use the current system to enable them to claim back the higher rate of Gift Aid.

We are also calling on the Government to extend transitional relief beyond 2011 if no decision is reached on how to reform Gift Aid before this time.