Hector from HMRC
Today is the last day of the current tax year (2010-11) in the UK.
This is just a short reminder to all our UK readers to make their big gift-aided contributions to their favourite (Catholic) charities.
Mine are Aid to the Church in Need, Survive Miva, and St Vincent de Paul.
Please use the comments section to suggest other worthy causes.
Finally, if there are any tax experts reading, could you tell me whether it would be feasible/practical/reasonable for David Cameron et al to legislate for 100% tax relief on charitable donations? By this, I mean adding the value of our donations to our tax free allowance. This way, we could all afford to be more generous, and help the ‘Big Society’ he keeps blathering on about. Any better suggestions are welcome. Thanks.
Catholicism Pure & Simple 
If the donations were added to our tax free allowance, then we would not have paid tax on that sum. We would benefit, but there would be no gift aid money to pass on to the charity. The idea that the government would give gift aid where no tax has been paid is a non-starter.
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BB
In principle, you do already get 100 per cent tax relief.
If paying tax at 20 per cent, you earn £100 but only receive £80. You give £80 to the charity, and the charity reclaims the tax of £20 that you have suffered. It costs you £100 and the charity gets £100, so 100 per cent tax relief!
If paying tax at 40 per cent, you earn £100 but only receive £60. You still give £80 to the charity and the charity still reclaims the £20. Via your tax return, you get further tax relief to save you (not the charity) the further £20.
As always with tax, there are a hundred and one complications. The biggest of these is national insurance, which you pay but do not recover. The Chancellor announced last month that he would like to merge the income tax and NI systems, which will save a massive amount of complexity but there will inevitably be winners and losers. As the losers generate all the publicity, it will be difficult politically. Until they are really merged, NIC is going to remain a cost for those giving to charity via gift aid.
The way to simplify all charitable giving would be simply to allow charities to reclaim a fixed percentage of all donations they receive, without worrying about the tax position of the donor. I don’t see that that would be impossible in principle. Possibly charities would not actually like it, though, as the gift aid system gives them an excuse to get our names and addresses so that they can send us mailshots whenever they wish!
On the question of which charities to support, another one I like is Sightsavers International. For something around £20 they can restore a person’s sight. When you think how much you would be prepared to pay to restore the sight of a loved one, that is an astonishingly good return on a small payment. Where the person is living in poverty, it also gives a real chance for him or her to have a higher standard of living for many decades to come. Several other charities do similar work.
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Another good charity that is urgently seeking funds is the Good Counsel Network, promoted here by SPUC (which is also very worthy of support, of course):
http://spuc-director.blogspot.com/2011/04/please-respond-today-to-good-counsel.html
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