GIFT AID, one of the largest tax relief schemes available to charities, might not be good value for money in its current form – and the taxman does not have the figures to prove otherwise, according to the spending watchdog.
The National Audit Office (NAO) said that while Gift Aid rebates have soared since the rules were simplified in 2000, HMRC does not have figures on how much, if at all, the scheme has boosted donations overall.
It also slammed the taxman in a report out today for failing to properly keep track of how much is lost through avoidance, fraud and error in Gift Aid relief.
HMRC has estimated the losses at £170m, but the watchdog believes the figure could be at least £55m higher.
Gift Aid allows charities to claim back the tax that working donors will have paid on their contribution. The scheme cost HMRC around £2bn in the last financial year.
“Gift Aid is an important source of income for many charities, worth £1bn to charities in 2012-13,” said NAO head Amyas Morse. “However, the exchequer departments cannot demonstrate that these incentives are working, or that the increased cost to the taxpayer has resulted in a rise in donations to charity.”