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Currently the amount of money from Gift Aid that directly benefits third sector organisations is increasing – it rose from £135m in 1996-97 to £750m last year (2005-06). However, it is estimated (by the Charities Aid Foundation) that an additional potential £700m in Gift Aid is still unclaimed by the sector.
In the Budget, the Chancellor announced the Government's intention to consult with the third sector on measures to increase the take up of Gift Aid and maximise benefit received by the sector through this tax relief.
Alongside the consultation, the Government will undertake a campaign to raise public awareness of Gift Aid, working with the third sector to target the promotion of Gift Aid most effectively.
The Government will also publish new guidance on tax-efficient giving for individuals before the summer and work with sector on payroll giving, recognising there is also scope for increasing take-up of this relief. Overall, charitable tax reliefs continue to be worth over £2.5bn a year to the sector.
All these actions will take place in the next year, before any changes come into effect on income tax levels.