the friend online
27 March 2009

Gift Aid and the 1% fund

Ruth Harrison (20 March) seems to wish us to reflect on the public policy aspects of the practice of giving tax relief to Gift Aid payments.

About thirty years ago, the Brandt Commission recommended that we all (individuals and governments) in the west give 1% of our income to the less fortunate. By giving tax relief on Gift Aid payments, our governments enable us to gift 1% of our gross income (rather than only 1% of our net income) to charity. Charity is, by legal definition and probably also conventional understanding, a matter of public benefit. As a matter of public policy, there is no way of saying whether the National Health Service, social services and so on are more or less worthy than any charitable purpose. Nor is there any way of ranking one charity over another. So government gifting to charities as requested by individual citizens is perhaps not such a bad method of selection. Government knows how much the community as a whole tends to give to charity each year and can budget for the tax relief entailed by the policy of supporting Gift Aid when deciding on its annual tax policy required to fund the expenditures such as Ruth mentions. If the recession (or depression) entails that government can no longer persuade us of the political acceptability of both supporting charitable gifts and funding government expenditure, you may be sure that a budget will one year contain an announcement to accord with such a dire economic state of affairs.

Doubtless, someone with a better memory than myself will be able to tell us whether the Brandt Commission 1% was for overseas aid, in addition to domestic charitable giving, or for total charitable giving (whether domestic or overseas). I suspect that the total giving should be nearer to an amount closer to that of the detested tithe (after making adjustments for the effect of social welfare policy). If Quakers and others had not had the tithe abolished, perhaps the welfare state would never have happened. Is it right that it has? Ruth’s answer seems to be that it is.
Harry Baxter
Harry is a researcher in tax philosophy.
The Brandt Commission

Harry Baxter


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a prison chaplain
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Gift Aid and the 1% fund
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Only sky?
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