Declaration form putting people off from claiming Gift Aid, report finds

Donors still don’t understand Gift Aid, believing that claiming it incurs a cost to the charity or their details may be used by fundraisers to pester for donations.

New research by HMRC, Gift aid: Understanding donor behaviour, shows that the public are being put off claiming the tax back from charitable donations because they are unsure what it involves or where the money goes.

The report is part of HMRC’s attempts to create a better understanding why many still don’t claim the concession – with the National Audit Office estimating £2.3 billion of donations a year go to charities without Gift Aid being claimed.

Charities and tax specialists have been working with HMRC to improve and simplify the gift aid declaration form.

Better education on how gift aid works is vital - Charities Tax Group

Two opportunities for disrupting habits exist, says the report’s authors.

First introducing Gift Aid ‘up-front’ at the same time as a request for a donation may mean that donors pay more attention to it and see it as a more integral part of their donation.

And second, changing the format of the declaration form may allow it to communicate key facts more effectively and make it harder to ignore.

Charity Tax Group has been among the organisations calling for simplification of the gift aid declaration.

A spokesman for the body said: “This timely research shows that despite good awareness of gift aid, there is a lack of understanding among donors about how it works in practice, with implications for take-up.

“In particular, the lack of understanding about the link to tax is a concern.

"Better education on how gift aid works is vital and CTG will continue to work with HMRC and sector partners to achieve this. The findings on the influence of habit disruption and the drivers for claiming or not claiming gift aid are very interesting and we will be analysing them in greater detail.”