Guernsey charities could unlock thousands of pounds in lost funding through better use of the island’s tax relief system.
According to the Association of Guernsey Charities, usage of the system which adds an additional 25% to the value of a qualifying donation is in decline.
How the system works
For individuals who have donated £500 or more to a Guernsey-registered charity within a year, their donation tallies can be “grossed up” for tax purposes, allowing the charity to reclaim the tax paid on the original donation, increasing the gift’s value without any extra cost to the donor.
Charities can also backdate tax relief for years up to 2010, when the relevant legislation was introduced.
The system effectively means a £500 donation becomes £625 for the charity, and it’s set to increase in the near year.
From January 2025, the maximum annual qualifying donation per individual taxpayer will increase from £7,500 to £10,000, with a £10,000 donation allowing the charity to reclaim £2,500.
For any charities backdating donations, depending on when it occurred will also change its value.
From 1 January 2010 to 31 December 2020, the maximum claim was £5,000 per individual, or £10,000 for a married couple, that jumped up to £7,500 per individual, or £15,000 per married couple for years 2021 and 2022.
Other changes have followed, with independent taxation brought in at the start of 2023, meaning claims could only be made on an individual basis, and another increase at the start of this year, climbing to £10k per person.
Declining usage
But, according to the AGC, usage of the tax relief system has seen a decline.
Wayne Bulpitt, AGC Chair, noted that the amount of tax relief paid to charities has declined by nearly a third – 32% over four years – with close to a quarter fewer charities claiming the funds back (-24%).
Mr Bulpitt said: “As we approach the end of the year, this is a great opportunity for donors to reflect on their generosity and for charities to ensure they are maximising their funding.
“We have seen a 32% decline in the amount of tax relief paid to charities from 2019 to 2023, £427,144 to £290,578, with fewer charities claiming. We are keen to encourage both donors and charities to take advantage of a simple means of increasing their funds.”
The AGC is aiming to reverse this trend.
It requires a little more paperwork, with both the donor and the charity each completing a form, which is obtainable from Revenue Services. Claims for donations made in 2025 can be submitted from January 2026.
According to the Director of local charity GROW LTD, it’s an easy process that can make a big difference.
Marguerite Talmage, said: “Grow has successfully reclaimed tax relief on many of the donations made during our redevelopment fundraising, and we continue to do so with contributions toward our annual overheads, delivering a significant saving on our overall costs.
“For every donation eligible for tax relief, we send a thank you letter and a Charity Payment Certificate, with a stamped, addressed envelope to make the process quick and easy. Donors have been eager to take part, helping us unlock valuable additional funding.”
Meanwhile, with the drop in charities claiming the tax relief, the GSPCA’s Manager stated it is vital for local charities to make sure they’re aware of Guernsey’s tax relief system, and it’s benefits.
Steve Byrne said: “At the GSPCA, we know every penny counts, especially as charities face rising costs and growing demand for services.
“That’s why it’s vital for all charities to claim the tax relief and for supporters to be aware of how their donations can go further. Together, we can make every gift go further for the animals and communities that depend on us.”