When Eton and Goldman Sachs run charities, system needs reform


1:50 pm - April 16th 2012

by Jim Jepps    


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There’s been much gnashing of teeth over the government’s proposal to cap tax relief on charitable giving at £50,000 (or a quarter of your income).

Charities are concerned that the changes will discourage the rich from donating if it’s no longer in their interests and The Telegraph reports today the government has accepted the changes in the rules will impact on charitable giving.

Most of us donate money without taking any tax benefit and no rich person will be prevented from donating to charity, only prevented from taking that money out of tax revenue in order to do so. Even with those caveats, charitable giving is in desperate need of reform.

There are over 162,000 charities in the UK. These range from wholesome providers of housing, healing or hope to less obviously charitable organisations. Eton, for example.

The elite school is very keen to show potential donors the financial benefits of handing over their cash.

While there’s no particular objection to people being able to give their own money to whomever they please, it can’t possibly be right that they take that money out of the revenue we use to pay for state education in order to fund Eton.

Goldman Sachs has a charitable organisation with an income, in 2010, of £57 million, although it only spent a little over £6 million of this on “charitable activities” and, according to the Charities Commission, it has no employees. Our current rules say you can reduce your tax bill by giving to Goldman Sachs Giving (UK) while councils plead poverty when it comes to keeping open libraries.

These rules allow the rich to take tax revenue out of the Treasury’s income and decide where it’s spent, whether that’s on something we can all agree is charity or organisations that look a lot less benign, but somehow have wangled charitable status.

I don’t want to see youth projects or medical research denied funding which is precisely why I don’t want to see the rich reducing the amount of tax they pay by bunging money to elite education establishments or having wings named after them in some dodgy institution.

If we lived in a society that didn’t let people fall through the cracks and ensured decent funding for housing, the old, the disabled, and the young we wouldn’t need some of these charities in the first place.

The first step is to ensure that we all pay our fair share in tax and that we tighten up who can and cannot call themselves a charity.

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About the author
Jim Jepps is a socialist in the Green Party and formerly blogged at the Daily (Maybe). He currently writes on London politics, community and the environment at Big Smoke.
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Reader comments


Okay, just straight off the bat, the money which goes to Eton’s charity does *not* fund the school.

My own school had a charity – the Foundation. And people were encouraged to donate to that. But the Foundation did not fund the school – it existed to pay the fees of people like me who had lost one or both parents.

Please get your facts straight before writing an article – it undermines almost the entirety of your point.

The fake libertarians who always tell us that Charities can take over from the state rather shoot themselves in the foot over this. Such is the whining from the rich demonstrates quite clearly that they donate for their own benefit.

Public schools have always been an example of that old maxim that “charity begins at home” The public schools are a giant tax avoidance scheme for the well off. People who talk endlessly about market forces love nothing more that a rigged market for their own benefit.

So, just to clarify, are you calling for tax reform or charity reform?

4. Biffy Dunderdale

“Most of us donate money without taking any tax benefit and no rich person will be prevented from donating to charity, only prevented from taking that money out of tax revenue in order to do so”

Just on a small point of fact, it is not “taking that money out of tax”. It is their money. You might say “preventing their money going to the taxman” instead. Its like people who say that taxcuts need to be “paid for”.

Only in a paralell universe could people keeping more of their own money be described as “taking”.

Not often I say this, but I agree with the Tories on this. And with Jim. The rich aren’t being “banned” from donating to charity, they are being told they should pay their fair share of tax – which goes to pay for the school, hospitals etc that we all need…

Interesting that the Today programme was apparently flooded with emails agreeing with this position – there’s a very strong propaganda push around on this, but not all of the public are swallowing it.

And there are clearly some highly dubious charities around – mysterious “foundations” that seem to employ surprising people or do things like “promote industry”, roles would seem to more properly belong within private companies.

6. Chaise Guevara

@ 1 George

“Please get your facts straight before writing an article”

What are the facts? You described the system at an unnamed school but didn’t actually clarify how it works at Eton.

Public (IE private) schools benefit from charitable status, despite the assertions @1. This surely demonstrates a screaming need to reform charity?

There are certainly far too many charities (currently something like 180,000 to 190,000 but hundreds/thousands are registered/deleted every year.
Many need to amalgamate to free up substantial sums of money currently paid to chief executives.
Instead of kicking useless MPs upstairs, couldn’t they work for charities for their fat cat pensions?
Wasn’t Derek Conway (ex Tory MP and notorious ‘fiddler’) at one time drawing down £90k at the Cats’ Protection League, that’s a lot of Kit-e-Kat?
Is he still at Press Tv – I wonder how much the Iranians are paying him?.

My own school has charitable status….and uses the edowment money from that charity to enable people who would otherwise not be able to go there to do so. When I was there is the 90′s some 60% of all kids there had some form of support from the school itself.

I have a few other concerns about people arguing that rich people shouldn’t be allowed to use charitable giving as tax deductible. Firstly it is pretty obvious that if you prevent it, charitable donations will suffer. Secondly, it makes the unhealthy suggestion that only government should really be the designator, designer and distributor for charity.

Lastly, do people know what a lot of the big charitable names are like in reality? Oxfam, Greenpeace, WWF and many others are huge lobby organisations, with a lot of the money they get to lobby government for more. Aside from the charitable work they do, they are also huge business enteprises…do we really want more large organisations controlling things at the expense of smaller grassroots orgnaisations, which will sufffer the most in any change in the law given they have the least resources, money and acces to lobby governments?

“Goldman Sachs has a charitable organisation with an income, in 2010, of £57 million, although it only spent a little over £6 million of this on “charitable activities” and, according to the Charities Commission, it has no employees. Our current rules say you can reduce your tax bill by giving to Goldman Sachs Giving (UK) while councils plead poverty when it comes to keeping open libraries.”

Oh, that’s very good, very good indeed. A nice slanting of the evidence, well done there!

You prompted me to go read the accounts of the charity. The numbers you’ve got are from their second year of operation. It looks to me like they’re trying to build up an endowment so that they can make long term plans for what they might want to support.

You know, the sort of thing that every charity is urged to do: not spend all of this year’s income on this year’s projects but have a chunk of capital so that you can make multi-year committments to long term projects?

@1 “My own school had a charity – the Foundation. And people were encouraged to donate to that. But the Foundation did not fund the school – it existed to pay the fees of people like me who had lost one or both parents.”

If the charity paid your school fees, then how was it not funding the school?

@Tim

Quite.

The largest charity registered in the UK is the Wellcome Trust, which had a net book value of £12.4 billion of which it spent £641 million on charitable activities in its last financial year, which is around 5% of its net value – it actually overspent by £301 million on the year compared to its investment income.

The Goldman Sachs trust has a book value of £56 million and an annual spend of around £6 million, a little over 10% of its book value, which stacks up pretty well for an organisation that’s aiming to build up a sustainable endowment fund.

Looking at the list of grants given by Goldman Sachs – and they work through the Charities Aid Foundation to manage their grant-making – there’s a fair degree of emphasis on funding Jewish charities, which is only to be be expected, but the two largest grants for the last year for which accounts are available went to an organisation called SHINE (Support and Help in Education), which runs educational support projects in disadvantaged parts of London and Manchester, and Room to Read, which sets up libraries and book clubs in developing countries.

On the whole, if anything deserves to be tax deductable then its giving disadvantaged kids a chance of a decent education, so I’ll happily give Goldman Sachs a pass if that’s where they intend to keep on spending their cash.

13. margin4error

george potter

erm – the Eton charity is Eton – it’s not a trust that funds additional stuff to the school – it’s not a seperate organisation run to pay the fees of poor kids – it is the school itself.

Eton is registered with the charities commission – and claims tax breaks which, by nature of being money, helps to fund the school.

That’s a pretty ludicrous situation – given that the ammount they claim back is estimated to work out at more than £2k per pupil.

That’s you me and every other taxpayer subsidising the “charitable” act of educating extremely rich children for money.

If your school was the same – then that’s just as sick.

But perhaps that’s not the situation with your school. Many schools do actually run small charities seperate to their operation as a school – to take donations to fund things like minibuses for the school team or special school trips or whatever.

That stuff is charitable. Subbing the fees of rich kids going to an expensive schools is somewhat more like a rip-off.

“That’s a pretty ludicrous situation – given that the ammount they claim back is estimated to work out at more than £2k per pupil.

That’s you me and every other taxpayer subsidising the “charitable” act of educating extremely rich children for money.”

Given that we taxpayers then don’t have to stump up the £8 k or so a year for a state secondary school place I think we do pretty well out of that actually. Looks like a £6k per head profit actually.

15. Evan Price

Permissible charitable objects include the provision of Education – that means that Education is a charitable object in itself and this is the basis under which private schools operate with the benefit of charitable status.

The assets of Eton are used to provide the facilities that the school uses. In addition, it will have funds that provide income to maintain those facilities (some of which are very old indeed as the school was founded in 1440) and to provide income for the charitable object – the provision of education.

Some in the Labour party and elsewhere object to the existence of private schools. The consider that there should be an additional test – and so in the latest reforms of Charity law, they introduced a ‘public benefit’ test in addition. This did not change the basic concepts of charity law – which have existed since the Statute of Elizabeth (the first one) – which means that permissible charitable objects include education.

The Charity Commission misunderstood the position and assumed (wrongly, in my view) that the addition of the public benefit test meant that the provision of education had to be enhanced by public benefit. Private schools, including Eton, made considerable efforts to increase the proportion of funding that went to providing subsidised places for people who could not afford the fees and to sharing facilities and other assets with other users – particularly with schools and other educational establishments in the state sector. The Charity Commission has recently backed down on its critcism of some private schools as a result of its mistaken position.

One of the reasons that private schools (I was a Govenor of one for a period) have increased their fees over the period since the new Act is that instead of using their charitable funds to subsidise all of the children, they took the view that they could increase the fees and increase the availability and size of bursaries for a larger number of chidlren from poorer backgrounds. Today, most private schools now limit their scholarships to about 10% of fees and award bursaries on an entirely means tested basis.

The next problem for those that criticise the existence of private schools is that the benefit that the schools obtain from being charitable is less than 5% of their total income – the reason for this is that fees pay for a service and so are not charitable in any sense, so the parents do not sign a gift aid certificate for the fees they pay for their child’s education. The saving that is made in terms of having about 7% of our children educated privately (over 600,000 chidlren) is considerable – the fact that the parents pay for that education out of taxed income is an additional benefit. In my view the saving to the taxpayer of those two factors is vastly larger than the minimal saving to the schools themselves that arises from their charitable status.

16. Frances_coppola

“Most of us donate money without taking any tax benefit”

Facepalm.

ALL charitable donations are free of tax. That’s true for basic rate taxpayers as much as the very rich.

No donor ends up better off as a result of tax relief on charitable donations. The money is GIVEN AWAY. There is no “tax benefit” to the donor. The benefit is to the charity.

The issue with the very rich is that they can afford to give away far more of their income, so as those donations are tax-free it is possible for them to reduce their effective tax bill to near zero. But they have still GIVEN AWAY THE MONEY. To call this a “tax benefit” is frankly silly.

What the Government’s proposal does is undermine the principle of tax-free charitable donation by creating a class of donations which are NOT free of tax. In effect they are taxing charities for the first time.

If I buy a service I have to pay 20% vat on that transaction. If the rich want to buy private education then they should pay VAT on it. And at the new 20% rate the Chancellor thinks is ok for the country.

So not only are the rich saving 20 VAT on the service they are buying, but they also save on their income tax as well. A nice tory double whammy.

Interesting that Goldman donates so much to Jewish groups. It is almost a reverse racism.

there’s no particular objection to people being able to give their own money to whomever they please

Yes there is. The objection is realised in the principle of taxation.

You are saying that people should be prevented from giving their money to whom they choose and that the state should intervene in the altruistic act, take more of it in tax, and then allocate it on their behalf.

By doing this, the state gains more leverage over the “charities” to whom the money goes.

19. Evan Price

“No donor ends up better off as a result of tax relief on charitable donations. The money is GIVEN AWAY. There is no “tax benefit” to the donor. The benefit is to the charity.”

The tax relief for a higher rate taxpayer is at the marginal rate – 40% or 50% and you claim back the relief at the difference between the higher rate and the basic rate (20%) in your tax return.

So if I give £100 to charity and am a higher rate (50%) taxpayer. The charity claims the £25 receiving £125. I can then claim the £137.50 at 20% and £125 at 10% in my tax return – a total of £40.

This comes out of my gross income … which I think is a tax benefit …

‘Lastly, do people know what a lot of the big charitable names are like in reality? Oxfam, Greenpeace, WWF and many others …’

Greenpeace itself is not a charity, although it has a charitable arm, the Greenpeace Environmental Trust.

@6 and @13

http://www.etoncollege.com/CampaignNewFoundation.aspx

“In order to remain a school of all the talents, we should like to be able to take more boys here irrespective of the family’s means. Some would be the sons or grandsons of Old Etonian families; some would be boys of character and ability with no previous Eton connection. At present almost a sixth of the boys are on reduced fees. We should like to do better than that.”

Now, I’d really prefer not to be defending Eton. But perhaps the OP could have included a proper look at the charitable work that the charity does and then fisked it to see whether it was mainly a charity or mainly a form of support for the school.

So basically what I’mn saying is: sources to back up assertions and opinions please. If I want to read things without having any idea whether they’re true or not then I’ll read the Daily Express.

@19

They pay the rate only on income *over* the threshold. So, though I haven’t done the numbers, I’m not sure they get a tax benefit as a result.

Amazing – Sally minces her words!
Of course, she gets her facts wrong as usual – Judaism is a religion so favouring Jewish charities is religious discrimination not racism.

@ Evan Price
Giving money away means that you have less money to spend on yourself (unless the “charity” is a phoney one that GO wants to attack).
For higher-rate taxpayers the amount of tax paid is less, so the cost of the donation is split between the donor and HMRC, but the donor is still out of pocket.
You are welcome to try telling my wife that she is better off because I use Gift Aid and hence never pay higher rate tax but she won’t be fooled by the sort of stuff you posted in #19

Anyone who criticises George Potter’s valid post should stop and check up on the Royal Masonic School: when I was young it only accepted orphans.
Public schools mostly started as charities to provide education to the children of those who could not afford private tutors (hence the name). Most if not all of them provided scholarships for bright poor boys (I have never heard of one which didn’t).

26. Frances_coppola

19, 22 and 24

A higher-rate taxpayer who declares Gift Aid donations on his tax return will receive tax relief on the difference between the 20% claimed by the charity and his highest rate. That will reduce his higher-rate liability, so in that sense it is a benefit. But the money has still been given away and the donor is out of pocket despite the higher-rate relief. That’s a very expensive way of getting a tax “benefit”.

27. Frances_coppola

23 John77

Umm, I think technically it is both, so Sally is possibly correct.

Charity giving by rich people is just another loophole in the already Swiss Cheese tax system. And all this guff about the odd deprived person getting a place at a private school. They only do that to justify their charity tax status.

The private schools need the odd poor person to act as a human shield for their fake claim to be a charity.

I’m sure the Anne Frank Trust will be delighted to discovere that they’re the beneficiaries of a discriminatory disbursement of charitable funds…

Oh FFS…

@ Frances
No: try talking to “Jews for Jesus”
A few years ago someone pointed out that, on the racial definition Yassar Arafat qualified as a Jew and Moshe Dayan did not…

@ Unity
Well said

Sally ignores any facts I mention: she pretends that a school that only accepts orphans has “the odd poor person to act as a human shield for their fake claim to be a charity”
What acts as a shield for her fake claim to be a human being?

33. So Much For Subtlety

The first step is to ensure that we all pay our fair share in tax and that we tighten up who can and cannot call themselves a charity.

We pay vast sums of money in tax. More than we have in the past. Not quite a peak of tax paying, but not far from it. Yet the more we pay, the more people we have demanding more money.

So how about also including the obvious issue – we need to all pay our fair share, and we ought to tighten up on who can call themselves a charity (it is absurd that Greenpeace can pass themselves off as one for instance), but we also need to tighten up on who can claim a share of our money. People who can work, should.

34. So Much For Subtlety

30. John77

No: try talking to “Jews for Jesus”

That is like talking to a few flat earthers about the shape of the world.

A few years ago someone pointed out that, on the racial definition Yassar Arafat qualified as a Jew and Moshe Dayan did not…

Then that person is a moron. Moshe Dayan was born to two Jewish parents, Jewish in the religious sense even if they were socialists, in what was then Ottoman Palestine. By Lake Kinneret in fact. Arafat was born in Egypt to a man who claimed to be from Gaza although his Mother and perhaps his Father as well were Egyptian. He was about as Palestinian as Edward Said. Even his alleged Palestinian connections were to the Khalidi family – which entered Palestine with the Arab invaders. Thus not even remotely Jewish. Not by religion, not by descent. Nothing.

35. Luis Enrique

this story is driving my crazy – if a rich person gets tax relief because they are donating £££ to charity that’s what’s supposed to happen, donations to charity are tax deductible on purpose. As people above point out, rich people are not enriching themselves by doing this, they are giving £££ to charity (and paying less tax as a consequence). This is a good thing to the extent it helps charities raise money.

[money given to charities that aren't "real" charities is a separate issue, and is something the charities commission should be cracking down on where it occurs]

Jim Jepps needs to read the comment above concerning Goldman Sach and acknowledge his error.

36. Robin Levett

@Frances Coppola #16:

The issue with the very rich is that they can afford to give away far more of their income, so as those donations are tax-free it is possible for them to reduce their effective tax bill to near zero.

Not so fast – there is a limit to the Gift Aid available, provided by the condition on the little statement you sign when Gift-aiding.

Gift Aid for the charity works by the charity claiming back the BRT on the grossed-up sum donated; so if I donate £100 cash, they reclaim from HMRC £25, which is the basic rate tax that would have been paid on that £100. The condition is that you have to have paid at least enough income tax to allow the chairty to reclaim it.

So: if I have taxable earnings of £10m (which would lead to an Income Tax liability of c£5m), the most I can give away is £8m, paying the rest in Income Tax for a tax rate on taxable income of 20%.

It’s possible that my gross income was greater than £10m, and I have claimed reliefs to get to the taxable income of £10m, which would reduce the effective tax rate on my gross income below 20%; but ultimately you must pay Income Tax of at least 25% of any Gift Aid donation.

37. Robin Levett

@John77 #30:

Try talking to the Jewish Free School. By applying the Orthodox definition and refusing to treat as Jewish the child of a female convert to (non-Orthodox) Judaism, they were correctly held to be discriminating racially, not religiously. When you define Jewishness largely by matrilineal descent (there are only 30-40 conversions to Orthodox Judaism a year), you inevitably define it in racial terms.

38. Margin4error

George Potter

You are being a little selective on the massive range of spending that Eton undertakes and that is thus charitable activity given that the school is a charity claiming lots of tax back of normal people for funding its operations.

Yes – some of that funding is to give free school places to some people – and some funding is used to subsidise the fees of people who can afford the full fees anyway. And some of the funding pays their teachers. And some pays their electricity bill. And some pays for the upkeep of their rowing facilities and athletics track and so on.

Pretending their charitable status applies only to one bit that sound’s moderately charitable is effectively lying.

@ 37 Robin Levett
They were discriminating between Orthodox and Non-Orthodox Jews. It was stated at the time that she would have been acceptable if she had converted to Orthodox Judaism. This was actually religious discrimination (in my view denominational discrimination) but was treated by the courts as racial because the law doesn’t cope with denominations that refuse to recognise the validity of other denominations of the same religion.
If you really imagine that Jews are a race, please look up the word “Falasha”

40. Robin Levett

@John77 #37:

This was actually religious discrimination (in my view denominational discrimination) but was treated by the courts as racial because the law doesn’t cope with denominations that refuse to recognise the validity of other denominations of the same religion.

Since the precise point at issue was whether it was religious or racial discrimination – religious would have been permitted, given the legislation – I’m comfortable with the idea that the Supreme Court didn’t shoehorn religious into racial. The discrimination was treated by the Courts as racial because the emphasis upon matrilineal descent over religious adherence made it racial; the JFS would have been perfectly happy to accept the atheist son of an Orthodox woman (or even a woman who acquired her Masorti adherence by descent), but refused the religious son of a Masorti convert.

@ Robin Levett
You may be comfortable with it but I wasn’t then and I still am not. we may have to agree to disagree over this because I am not going to be persuaded that refusing her child because she had converted to Reformed rather than Orthodox Judaism was not religious discrimination.
You haven’t commented on Falasha Jews. Nearly all the Russian Jews who comprise a significant minority of the population of Israel are spiritual descendants of Abraham but have no genetic links.

42. Robin Levett

@John77 #41:

You haven’t commented on Falasha Jews. Nearly all the Russian Jews who comprise a significant minority of the population of Israel are spiritual descendants of Abraham but have no genetic links.

Is discrimination against sub-Saharan blacks racial discrimination?

43. Robin Levett

continuing my #42:

BTW; I assume that you meant to say:

You haven’t commented on Falasha Jews. Nearly all the Ehtiopian Jews who comprise a significant minority of the population of Israel are spiritual descendants of Abraham but have no genetic links.

44. Robin Levett

@John77 seriatim:

One further point. It is possible to discriminate in relation to Jewishness on both racial and religious grounds. The JFS discrimination was on racial grounds.

Benjamin Disraeli MP, however, is an interesting case. He was a Sephardic Jew by birth, but was baptised into Anglicanism at the age of 12. Had he not been, he would have been debarred from taking his seat in Parliament at any time until 1858, when the Jews Relief Act changed the law to allow Jews to sit – previously the Test Acts had required MPs to take Anglican (and thereafter Christian, following Catholic emancipation) communion. That would clearly have been religious, not racial, discrimination.

The fact that he was Christian by religion, however, did not stop his critics from couching their criticism in the most anti-semitic of terms. That was just as clearly racial, not religious, abuse.

45. Evan Price

“You are welcome to try telling my wife that she is better off because I use Gift Aid and hence never pay higher rate tax but she won’t be fooled by the sort of stuff you posted in #19″

Sorry, but you appear to misunderstand what I mean by a ‘tax benefit’. In essence, a very rich person can use donations to charity to limit or even eliminate their liability to pay tax – as the current limit on what you can claim back is the entirety of your liability to tax.

This can be done out of capital or income – and so the person who has made his fortune can effectively decide to give away much of that capital (something that some of the richest Billionaires are suggesting be done in any event) and in so doing limit or eliminate their liability to tax.

In this way, the rich person ‘opts out’ of tax and instead choose which charities should benefit – and I am not sure that it is a good idea for a rich person to effectively have the right to choose how the entirety or the majority of their tax should be spent.

When one consider the misunderstandings about what is ‘charitable’ in the posts above, it is clear that there are many that would object to the very rich individual choosing to benefit Eton in this way; but at the moment and without a considerable change in the definition of what is a charitable object, there is nothing to limit that choice.

It is this aspect of the giving that is the ‘tax benefit’ that I am referring to – of course, I accept that the person giving away capital or income is not personally benefitting from the tax = although I should add that a rich person could register and endow their own named charity and then use the money in charitable ways over the following years as they wish – and given the current difficulties facing the Charity Commission about what amounts to ‘public benefit’, the class of beneficiaries could be quite limited …

46. Robin Levett

@Evan Price#45:

Sorry, but you appear to misunderstand what I mean by a ‘tax benefit’. In essence, a very rich person can use donations to charity to limit or even eliminate their liability to pay tax – as the current limit on what you can claim back is the entirety of your liability to tax.

Bzzzt – wrong.

The current highest limit on what you can claim back is that which leaves you with a tax liability of 25% of the amount Gift Aided. You must have paid enough tax for the charity to claim back, and the charity claims back 25% of the donation (or 20% of the grossed up sum).

That would mean that the Treasury doesn’t see any of the money, apart from fleetingly – but there is a real tax liability paid in real money by the Gift Aider.

47. Robin Levett

@Evan Price #45 (contd):

In fact my comment at #36:

So: if I have taxable earnings of £10m (which would lead to an Income Tax liability of c£5m), the most I can give away is £8m, paying the rest in Income Tax for a tax rate on taxable income of 20%.

is correct only if the taxpayer doesn’t claim back higher rate tax paid. If s/he does, the maximum s/he can give away is considerably lower.

48. Evan Price

But you don’t have to sign a gift aid certificate …

49. Evan Price

And you don’t for gifts of shares and securities or interests in land …

50. Robin Levett

@Evan Price 48/49:

Without the taxpayer’s declaration, the charity won’t get the tax back.

Before your charity or Community Amateur Sports Club (CASC) can claim tax back on a donation made by an individual, you must obtain a Gift Aid declaration from that individual – the donor.

The declaration must contain certain information about the donor and show that your charity or CASC has advised the donor that they will need to pay at least as much UK Income Tax and/or Capital Gains Tax for the year of donation as your charity or CASC, and any other charities and CASCs they donate to, will reclaim on their donation.

HM Revenue & Customs (HMRC) may ask to see the declarations so your charity must keep these records to support your Gift Aid repayment claims. It is important to remember that every donation included in a claim must be supported by a Gift Aid declaration.

http://www.hmrc.gov.uk/charities/gift_aid/declarations.htm

Note the emphasised words.

The condition on the Gift Aid certificate, by the way, reflects the existing law, it doesn’t impose it (so non-signature doesn’t mean you can give away tax you haven’t paid).

And you don’t for gifts of shares and securities or interests in land

Unsurprisingly, since you can’t Gift Aid such gifts – Gift Aid is restricted to monetary gifts. The system works differently here – instead of the donor paying BRT and the charity reclaiming it, and the donor then getting tax relief at (HRT less BRT), the gift reduces the donor’s income to the extent of its value, so the donor gets relief at HRT.

This isn’t, however, the main issue, which is monetary gifts.

51. Evan Price

“This isn’t, however, the main issue, which is monetary gifts.”

Sorry, but I was talking about the effect of gifts made out of income and capital – and the ability of the very rich to substitute some of their (and in certain cases all of their) income tax liability for gifts they make to charity.

I was making a value judgment based on that ability that says that there should be a limit on what a very rich person can choose to do … and in this respect, the gift aid system is merely part of the story – not the entirety of it.


Reactions: Twitter, blogs
  1. Sami

    When Eton and Goldman Sachs run charities, system needs reform http://t.co/XwsIiEn6

  2. John Finucane

    When Eton and Goldman Sachs run charities, system needs reform http://t.co/XwsIiEn6

  3. Dagmar Noble

    When Eton and Goldman Sachs run charities, system needs reform http://t.co/XwsIiEn6

  4. leftlinks

    Liberal Conspiracy – When Eton and Goldman Sachs run charities, system needs reform http://t.co/QRcwJn5l

  5. David Dubost

    When Eton and Goldman Sachs run charities, system needs reform http://t.co/2gzFIEWt

  6. Andrew Ducker

    When Eton and Goldman Sachs run charities, the system needs reform http://t.co/jHtBswb7

  7. maxlawsontin

    http://t.co/4Ag90SYz When Eton and Goldman Sachs run charities, system needs reform

  8. Sam Kington

    When Eton and Goldman Sachs run charities, the system needs reform http://t.co/jHtBswb7

  9. Martin Crozier

    When Eton and Goldman Sachs run charities, system needs reform http://t.co/XwsIiEn6

  10. Robert CP

    When Eton and Goldman Sachs run charities, system needs reform | Liberal Conspiracy http://t.co/V2Jquywh via @libcon

  11. rosie cynter

    When Eton and Goldman Sachs run charities, system needs reform …: Charities are concerned that the changes wil… http://t.co/JZ5DKRSV

  12. BevR

    When Eton and Goldman Sachs run charities, system needs reform | Liberal Conspiracy http://t.co/ztrT74Fz via @libcon

  13. Ernest Spencer

    When Eton and Goldman Sachs run charities, system needs reform …: Charities are concerned that the changes wil… http://t.co/7reELh7W

  14. CapitalDirectFunding

    When Eton and Goldman Sachs run charities, system needs reform …: Charities are concerned that the changes wil… http://t.co/n7yWtSun

  15. Paul Southworth

    Why the system of tax relief for wealthy donors to charity really does need reform: http://t.co/jxpaOtUv h/t @libcon

  16. Link Loving 18.04.12 « Casper ter Kuile

    [...] When Eton and Goldman Sachs run charities, you know the system needs reform. Jim Jepps. [...]

  17. Sky Pendle

    When Eton and Goldman Sachs run charities, system needs reform | Liberal Conspiracy http://t.co/3qWE2QQe via @libcon

  18. Rose Dawn

    When Eton and Goldman Sachs run charities, system needs reform | Liberal Conspiracy http://t.co/gIKDZXfO #classwar

  19. paul smith

    When Eton and Goldman Sachs run charities, system needs reform | Liberal Conspiracy http://t.co/gIKDZXfO #classwar





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