Millennium Gift Aid: UK tax-payers only

TO HELP THE WORLD'S POOREST COUNTRIES

The UK Finance Minister () Rt. Hon. Gordon Brown MP,  has announced 'Millennium Gift Aid', to support education and anti-poverty projects in the world's poorest countries as we enter the next century. The scheme will encourage individuals and businesses in the UK to help people in these countries through tax relief on donations.

The Chancellor said:

"'Millennium Gift Aid' will make it easier for businesses and individuals to play a crucial role in reducing disadvantage, both in living conditions and in opportunity, in the world's poorest countries. Tax incentives of this kind are one way of encouraging charitable giving to help those who are truly in need."

'Millennium Gift Aid' will lower the minimum donation which gets Gift Aid relief from 250 pounds to 100 pounds where an individual gives to these causes. The Chancellor has also proposed relief for individuals who make a number of smaller
donations by installments totalling 100 pounds.

Businesses will get extra tax relief when they donate goods to help education projects.

'Millennium Gift Aid' will be launched later this year and continue until the end of the year 2000. Any charities working to support education and anti-poverty projects in the world's poorest countries will be able to raise money in this way.

Millennium Gift Notes

1. The UK tax system already has a wide range of incentives to encourage giving to charity. Gifts by both individuals and companies can qualify for income or corporation tax relief under a range of schemes; legacies to charity qualify for
   relief from Inheritance Tax, and the income of charities themselves is already very largely relieved from tax.

2. Gift Aid is a relief for one-off cash gifts to charity introduced in 1990. They generally have to be 250 pounds or more. The rules are at Section 25, Finance Act 1990, for individuals, and at Section 339 of the Income and Corporation
   Taxes Act 1988 ("ICTA 1988") for companies.

3. Traders who give used plant or machinery to schools and colleges - typically second hand computer equipment - can do so without bringing its market value into account for tax purposes. The same applies when traders give their own trading stock. The rules are at Section 84 of ICTA 1988, which  was introduced by Section 68 of the Finance Act 1991.

4. Consultation on the Chancellor's proposals for an initiative to support the world's poorest countries was announced in an Inland Revenue press release of 17 December 1997.

5. The charity tax review was announced in a Treasury press notice of 2 July 1997.

6. The estimated cost of the extra reliefs for individual giving are 15 million pounds in 1998-1999, 25 million pounds   in 1999-2000 and 20 million pounds in 2000-2001.

Source:

Other references:

• HM Treasury
• Budget 98
• A London based charity is co-ordinating to cancel unpayable debts of the poorest countries by the year 2000. They are backed by all the major aid agencies, churches and other national organisations. Jubilee 2000 has also been launched in Germany, Austria, USA, Canada amongst other countries.