TaxAdministrationFall in tax rate will hurt charities

Fall in tax rate will hurt charities

Charities expect to lose more than £90 m a year when the lower rate of income tax is introduced

Charities are bracing themselves against a yearly loss of more than £90m when
the income tax rate falls from 22% to 20% next month.

Although the change is good news for consumers, it will reduce the amount of
Gift
Aid
charities can reclaim on donations, according to
The
Press Association
.

Gift Aid enables charities to reclaim the tax paid on one-off donations,
which means when Gift Aid is included, every pound donated to charity is
actually worth £1.28 to the organisation in question.

But from April 5 the value of donations will drop to £1.25 for every pound
donated, which will reduce charities’ income by more than £90 million a year –
the equivalent of vaccinating 18 million children against childhood diseases.

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