Charities: Grateful for Gift Aid relief

The charity sector has warmly welcomed the Budget's deferment of a cut in Gift Aid.

Although the basic rate of tax is being lowered to 20 per cent Gift Aid will continue at 22 per cent until 2011, in what Alistair Darling described as a "transitional rate".

There may be dispute over how much charities will gain from the measure – the chancellor says £300 million and the Charities Aid Foundation (CAF) £90 million – but charitable organisations have embraced the move.

John Low of the CAF said the Budget was "fantastic news for charities", while Oxfam's Phil Bloomer said his organisation was relieved it did not have to budget for a "significant loss" in the next three years.

Others are now turning to how the system can be reformed in the years after 2011.

The National Council for Voluntary Organisations (NCVO) called for a move to an accounts-based Gift Aid system, based on charities making direct claims to the government based on the percentage of its donors who are taxpayers.

Meanwhile Lindsay Boswell of the Institute of Fundraising warned it was important to maintain the partnership between charities and the government to ensure such measures reach their full potential

"Central to this is identifying and removing the key barriers to growth and the institute would urge government to prioritise and move quickly with many of the proposals that have been outlined today," she finished.