Letters - 31 July 2015
From Gift Aid to courage
Gift Aid
I understand and respect the concern that Mary Upson (17 July) has raised about Gift Aid but I don’t agree with it.
In a messy world I believe charitable giving is good and necessary, so I am glad governments encourage it by subsidising charities through Gift Aid, even if I might argue with the present balance between need that has to be met by charity and need met by the state (all of us) through taxation.
I agree with Mary that it would be fairer if, say, all charities received government subsidy in proportion to their income regardless of the tax status of their donors. That would be an improvement, though possibly open to abuse, and it would take one burden of administration off charities. But that isn’t where we are. Most charities will have a mix of donors and will be able to benefit from Gift Aid. As a trustee of a number of charities I am thankful that we have that source of income. Life is not perfect so don’t throw out the good because it isn’t the best.
Gift Aid lets me, as someone fortunate enough to be a standard rate taxpayer, divert some of my tax to good causes. I like to be sure that the proportion of my tax that goes to my chosen charities (in particular, the Religious Society of Friends) at least exceeds the proportion that goes to armaments. It does not give me any monetary benefit, though it would if I were a higher rate taxpayer, which is one of the weaknesses of the present system.
Roger Sturge
Mary Upson is right that selective tax reliefs (of which Gift Aid is but one example) can create exchequer costs which compromise the equity of the tax system.
Sometimes, the objective is to encourage the wealthy to bring about what John Woolman called ‘improvement’ of the human distribution of creation’s resources, in a way which is consistent with equity (Quaker faith & practice 20.32).
Usually, charities for the relief of poverty act as channels for either relief of misfortune or correction of injustices created by humankind or their governments. An example of the last is the conferring of ‘triple lock’ increases in state pensions, whilst capping and from 6 April 2016 freezing annual increases in some welfare benefits of working age claimants. Some better off pensioners gift the benefit of the ‘triple lock’ to charities for the relief of poverty. The donors are, nevertheless, taxable on the amount of pension income gifted to charity net of the tax payable by the donor. By consenting to the donee charity claiming Gift Aid relief the donor ensures that the income transferred is ultimately not taxed as, in most cases, it would not have been if the government had more justly paid this benefit directly to working age welfare recipients. Thereby, Gift Aid helps towards correcting state generated injustice without really imposing a substantial cost on other taxpayers.
Harry Baxter
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