Tax relief adds up to £4bn

New figures show that UK charities claimed £3 billion and donors £1.09 billion in tax relief in the last financial year.

The HM Revenue & Customs (HMRC) statistics for 2012-13 show total tax relief claimed had risen from the previous year, when the figures were £2.85 billion for charities and £1.03 billion for individuals.

Individuals’ tax relief showed a significant increase for both inheritance tax, up to £510 million from £480 million, a rise of six per cent, and for payroll giving, up £10 million to £40 million.

Payroll giving saw increases in the number of donors (up two per cent to 750,000) and gross donations (up five per cent to £124 million). HMRC said the growth in the number of payroll giving donors from 280,000 in 1990-91 represented a 170 per cent increase.

The charities’ tax relief total includes tax repayments, non-domestic rates, VAT and stamp duty land tax. HMRC said: “The long-term trend for tax repayments (to charities on donations) is one of growth – an increase of just over £600 million from 1990 to 2012 (not adjusted for inflation), or 130 per cent.”

In light of the long-term trend in growth for payroll giving, charities may wish to do more to explore this option as part of their fundraising programmes.

The figures also clearly underline the value of tax relief to charities and individuals and reinforce the importance of charities ensuring they maximise the efficiency of their tax affairs, so they receive all the tax relief to which they are entitled.

For more information on all aspects of charity taxation, please contact the Nicklin’s team.