The Budget fine print contains a measure to extend Gift Aid relief for donations to charities anywhere in the European Union, rather than just for UK charities. This has been welcomed by the Chartered Institute of Taxation (CIOT).
Peter Fanning, Chief Executive of the CIOT, said:
"Any extension of Gift Aid is to be welcomed and this extension to cover charities established elsewhere in the EU is something we have long argued for. In our view, the existing Gift Aid restriction to UK charities alone is one of many areas of the UK tax code that do not comply with EU rules.
"This will remove the administrative burden for charities based in other EU countries of having to set up UK entities in order for UK individuals to be able to claim Gift Aid.
"Hopefully this is the start of wider reforms of Gift Aid: there is a real need to simplify the administration of Gift Aid for charities - again something we have long argued for."
Notes to Editors
1) Gift Aid gives relief to donors for cash and certain other assets donated to UK charities. Under EU rules, member states' tax systems cannot contain measures that, in broad terms, are biased against other member states. By not allowing relief for donations to charities outside the UK, Gift Aid seem to breach this rule.
This restriction caused real problems for many donors in the wake of the Boxing Day tsunami. That would still be an issue, as many of the relevant charities are outside the EU but at least donations to help elsewhere in the EU are now within scope of Gift Aid.
2) The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT's primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it - taxpayers, advisers and the authorities.
The CIOT's comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members' experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.
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