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Giving not taking tax advantages

Charities are missing out on £372m in potential donations this year because the public is not aware of tax-efficient ways of giving, says IFA Promotion.

A total of £7.5bn of charitable donations were made last year but only £2bn were made through the tax-efficient covenant, payroll giving and gift aid schemes, according to the latest figures from IFAP&#39s Wasted Tax campaign.

Covenants to charities must be made for four years but can be for any amount while one-off payments can be made through the gift aid scheme and regular payments can be made via payroll giving.

Of the 13.6 million taxpayers who gave to charity in 2001, just 504,000 made use of the payroll giving scheme, each donating an average of £145.

IFAP has calculated that if just 20 per cent of employees who donate more than £5 a year to charity did so through payroll giving, charities would receive an additional windfall of £152m.

Payroll giving now allows any amount to be deducted from an individual&#39s salary, with the Inland Revenue adding 10 per cent to each donation until March 2003.

A £7.80 payroll donation from a basic-rate taxpayer will add up to a £10 donation and the Government will add £1.

Chief executive David Elms says: “While people will always want to slip a few coins into a collecting tin or sponsor a fund-raising event, their chosen charities will benefit far more by donations made tax-efficiently. We are urging people to give what they can but we want them to ensure that the taxman does the same on their behalf. It is easy to arrange and you do not have to give a large amount.”


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