Taxpayer to top up charity buckets

In plans outlined in the Queens speech, taxpayers will top up donations to charities and voluntary groups that rely on small donations under £20.

Groups will be able to apply to claim cash from the Government on up to £5,000 of small donations.

The Government will give charities and churches 25p for every £1 collected in small donations.

The plans are aimed at reducing paperwork for charities who currently have to fill in forms to get tax relief under the Gift Aid scheme.

However, experts from the Charities Aid Foundation said the new scheme is likely to be “too complex in reality for many small charities”.

The charities’ lobby group said it would prefer a simplified Gift Aid system giving tax relief, allowing people to register for the scheme once a year.

 “The Government recognises that Gift Aid is overly complicated,” said Hannah Terrey, head of policy at the foundation. “We agree that the scheme needs to be simplified for donors and charities but it would be much better to fully modernise the system and ensure it is fit for future fundraising and digital giving.”

The group also said it would be more helpful for the Government to scrap its plans to limit tax relief when millionaires donate to charity.

“We also need the Government to drop the Chancellor’s proposed cap on tax relief on charitable donations, which we believe will cost charities up to £500 million per year,” Ms Terrey said.

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