Call for Gift Aid increase after budget concessions

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MIxed bag for the third sector 

9th July 2020 by Robert Armour 0 Comments

A call has been made for Gift Aid to be increased calls following the chancellor’s VAT cut for the tourism and hospitality industries. 

Rishi Sunak announced a six-month reduction from 20% to 5% in the rate of VAT on food, accommodation and attractions in a bid to help industries that have been severely affected by the coronavirus outbreak. 

CAF led a group of voluntary sector organisations that last month asked the government to increase the rate of Gift Aid charities receive from 25 per cent to 33 per cent over the next two years in a bid to provide a £450m boost to the sector’s finances.

Sir John Low, chief executive of CAF, reiterated calls for a temporary increase in the rate of Gift Aid. 

“The Chancellor has laid out several positive measures to help people, especially young workers, to weather the effects of the pandemic,” he said. 

“We continue to urge the Treasury to consider the proposal to increase Gift Aid so that charities can play their part in rebuilding our economy.

“Just as we need the hospitality sector to survive, people across the UK need charities to still be there as we emerge from this crisis.

“Charities are integral to the UK’s recovery and are at the heart of our communities. Indeed, together they currently employ more than 900,000 people in the UK.”

Sunak also announced that the government would pay companies a £1,000 bonus for every staff member returning from furlough who is retained for three months from when the government’s furlough scheme ends in October.

Government figures showed last month that 164,000 people in the voluntary sector had been furloughed, so the scheme could be worth £164m to the sector if all of those jobs are protected until January. 

Elsewhere, the Poverty Alliance welcomed the announcement of the kickstart jobs scheme which will help young people into work. However the charity also called for further measures to protect precarious workers.

Peter Kelly, director of the Poverty Alliance, said:  "Young workers have been hard hit by Covid-19 job disruption, so the chancellor's announcement of a kickstart jobs scheme is welcome. But as the pandemic has highlighted, for too long people have been locked into poverty by low pay and insecure work.

"So these jobs should pay at least the real Living Wage and should have been accompanied by measures to tackle the precarious work that too many young people have to rely on. Part-time jobs that pay only the minimum wage cannot be a long-term solution to the problems in our labour market.

"Our recovery should be based on principles of fair work; that means redesigning jobs not reinforcing current problems.

He added: “The announcement of vouchers to support the hospitality sector falls short of expectations. At a time when more people than ever before are relying on emergency help from food banks, it is action to put cash in people's pockets that is required, not the offer of a £10 discount on eating out."