CHARITIES are set to lose more than £90million a year when income tax drops next month.
Kent-based Charities Aid Foundation (CAF) is urging people to give lumps sums to their favourite charitable organisations before April 5 so they can claim the tax back at a better rate.
Income tax will be lowered to 20p in £1 from the start of the new tax year, which will hit charities that claim tax back on donations through Gift Aid hard.
At present, every pound given to a charity using Gift Aid is worth £1.28 but from April 5, this will drop to £1.25 – a loss of around £90million a year.
CAF, based in West Malling, works to ensure charitable donations are made and used in the most efficient way.
Chief Executive John Low said: “It is good news for individuals that income tax is dropping but there will be millions and millions less for charities to claim back.
“Every pound counts, particularly as we fear that this will be a hard year for charities anyway due to the economy slowing.
“If you are a UK taxpayer and are planning to make a one off donation it would be best for your charity if you give before April 5.”
Age Concern Director General, Gordon Lishman said: “We stand to lose £40,000 next year alone. This is money we will have to find from somewhere else if are we are to continue all our work to fight for a better deal for the most vulnerable older people in the country.”