Charities 'missing out on £940m a year in tax relief', claims research

Research is suggesting that the charity sector is missing out on more than £940m a year because donors are failing to claim tax relief on the money they give.

The study has found that six in ten charity supporters are not claiming tax relief on donations.

Also, only 59% of adults are aware they can claim personal tax relief on charitable donations they make.

Tax relief includes Gift Aid as well as leaving a legacy to charities, according to the study by Handelsbanken Wealth Management & Asset Management.

“Charity donors will want to see the organisations they support receiving the full benefit of donations, which should include claiming the tax relief whether it is through Gift Aid, or consulting a financial planner,” said the firm’s head of tax Mark Collins.

An example he gives is that “giving as much as 10% of your estate to charity can reduce IHT rates from 40% to 36% which would be very much welcomed by charities and potentially better reflect people’s wishes”.

Handelsbanken Wealth Management & Asset Management's research also includes a regional breakdown of people who are failing to claim tax relief on charitable donations.

This found that almost three quarters of people in the North West and Yorkshire & The Humber are not claiming tax relief on donations.

The best areas include London, where only 31% are not claiming tax relief on their giving and Northern Ireland, where 51% are not claiming the relief.

Earlier this month Charities Aid Foundation urged charities to ensure their donors are aware of tax benefits in their giving, such as Gift Aid.

The call was made after CAF warned that six in ten people plan to cut back on their spending over the next six months. Also, earlier this year it noted that two million fewer people donated to charities.

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