Gift Aid

Gift Aid is a key income stream for Cancer Research UK - in 2006/07 the scheme generated approximately £23m of income. This income could cover the cost of running approximately 23 laboratories within the Cancer Research UK London Research Institute for a year. Scientists at this Institute are conducting intricate laboratory studies to discover exactly how and why cancer develops. This knowledge is essential for developing new ways of preventing, diagnosing and treating cancer.

In the 2007 Budget, Gordon Brown announced that the basic rate of income tax would fall from 22 pence to 20 pence from April 2008. This change has a knock-on effect on Gift Aid for charities and means that Gift Aid repayments to charities will fall from about 28 pence in every pound to 25 pence in every pound. This drop could lead to a fall in income of as much as £3 million for Cancer Research UK- that equates to the funding for 85 PhD students for a year.

Treasury Gift Aid consultation

At the same time as this announcement in the 2007 Budget, the Treasury also announced that they would be carrying out a consultation with the third sector to increase the take-up of Gift Aid. In September 2007, Cancer Research UK responded to The Treasury’s Gift Aid Consultation Paper. In our response, we identify a number of recommendations to improve the take up and administration of Gift Aid. Our response focuses on simple and practical solutions and we have drawn on our widespread experience of dealing with Gift Aid to draft our recommendations. Moving forward, we will be working closely with the Government to develop the ideas outlined in our consultation response.

Cancer Research UK’s views on Gift Aid consultation response in full.

Transitional relief

Ahead of the 2008 Budget, we were keen for the Government to think about what measures could be put in place to lessen the immediate impact of the tax change for the charity sector. Cancer Research UK and other charities asked their staff to write to their MPs on this issue. The Cancer Research UK Policy and Public Affairs team also raised our concerns directly with Ministers in meetings.

On the 12th March 2008 the Chancellor, Alastair Darling MP, announced in his Budget that in recognition of the vital role charities play, he will give transitional relief on Gift Aid for the next three years. The translational relief is worth about £300 million to the charity sector and approximately £10 million to Cancer Research UK over three years. The basic rate of income tax will continue at 20%, but Gift Aid will continue at a transitional rate of 22% for three years.

Harpal Kumar, our Chief Executive said ‘A crucial decision has been made in this Budget on Gift Aid which will prevent the charity sector from losing hundreds of millions of pounds as a result of the drop in the basic rate of income tax in the last Budget. We are very pleased to see the Government Iistening to the sector on this crucial source of income as we’ve been working hard to convince the government to support charities.’