The taxing reality of tax
6 June 2011 | By Cause4 staff
New research, undertaken by financial services leader JP Morgan, has been released focusing on the motivations and barriers affecting philanthropist’s giving habits in the UK. The survey, which was conducted amongst 200 of JP Morgan Private Bank’s ultra high net worth clients, has collated the opinions of 78 respondents worth an estimated collective wealth of £6 billion.
Amongst the findings, coming during the same month The Sunday Times giving list illustrated a drop of £818 million in the last year, JP Morgan cited that 30% felt better tax incentives were needed to encourage giving, suggesting that new tax rules would make a significant difference to giving.
This correlates with a survey entitled Finance Count 2011 conducted by Agenda Consulting in collaboration with the Charity Finance Directors’ Group (CFDG). The survey concentrated on the finance management of 64 charities with an annual income of over £1million, and found that charities are missing out on 32% of the Gift Aid they are entitled to claim.
In the last month, numerous reports have indicated a need to improve giving incentives in the UK, with particular reference to donors/charities needing to utilise tax relief and gift aid schemes to their benefit. The use of varying tax relief schemes, such as on gifts of shares and legacy gifts, have decreased in the last five years.
The Government needs to carefully consider the findings and improve incentives for philanthropists and charities if they are to improve the UK’s giving habits.The sector should be doing more to promote, and make accessible, all available forms of tax-efficient giving for donors.
In light of this, we will be extremely interested to see whether the Government’s Giving White Paper impacts positively on the issues stated above. Will reducing inheritance tax to 36% for those leaving 10% or more of their estate to charity illustrate the ‘powerful new tax incentives’ needed to encourage philanthropy? Whilst enabling an online filing system for gift aid will undoubtedly reduce paperwork, in what ways will this help charities to better understand the system and encourage them to utilise an ‘accessible’ scheme?
Let us know your thoughts.