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Museums are losing out on Gift Aid

Patrick Steel, 26.11.2014
Research finds £2.3bn of donations made without claiming Gift Aid
Museums are among the charities that are losing out on millions of pounds in Gift Aid, according to a recent report commissioned by HMRC.

The report, entitled Gift Aid: Understanding Donor Behaviour, includes a finding by the National Audit Office (NAO) that Gift Aid was not used for around £2.3bn of charitable donations in 2012-13, and has led the Treasury to announce it will simplify the Gift Aid model declaration form.

The report found that some people were not claiming gift aid because of misconceptions about it, believing that there would be a cost to the charity or to themselves, or that it was such a negligible amount that it was not worth claiming.

Others were deterred by an unwillingness to share personal information, or through a general view of form-filling as inconvenient.

The report concluded: “Changing information about Gift Aid will be central to increasing the number of correct claims, and understanding is important to decisions… the findings suggest that once a decision had been made about whether to claim, behaviour quickly became habitual and automatic.

“Consequently, changing Gift Aid behaviour requires a two-part process: to disrupt existing habits, and to address barriers to claiming or misunderstanding.”

Priti Patel, the exchequer secretary to the Treasury, said: “Gift Aid is an important tax relief for charities, which helps to provide essential revenue to charitable causes.

“This research shows that there is more that government can do to boost eligible donations, which is why we are simplifying the declaration forms to make sure donors understand when they’re eligible so that charities can maximise the financial donations they receive.”

Sharon Heal, the director of the Museums Association, said: “Gift Aid is a valuable source of income for many museums and we welcome the government’s move to simplify the model declaration form to encourage more people to participate in the scheme.

“It is important that museums and museum visitors are aware of the benefits of Gift Aid, and we would encourage organisations to take advantage of the scheme by doing everything they can to make sure that visitors understand how Gift Aid works and what it is for.”

A Treasury spokeswoman said the new declaration form would be available in early 2015.

Gift Aid is a government scheme that allows charities to reclaim basic rate income tax on gifts, increasing the donation by 25%. According NAO figures around £1bn in Gift Aid was paid to charities in 2012-13, around 2% of all charities’ income.


Gift Aid and museums