our parliamentary correspondent, Accountancy Age, Wednesday 8 September 2010 at 09:24:00

ResPublica argues taxman?s antiquated systems cost the charity sector up to£75m a year

HM Revenue and Customs is being urged to modernise its antiquated paper-basedsystems to enable charities to reclaim tax through "gift aid" according to aninfluential think tank.

A report from ResPublica warns that the charity sector is losing out on £750ma year in costs and potential revenue because the existing system is toobureaucratic and estimates each claim for a tax refund costs HMRC £5 to process.

"Digital Giving, Modernising Gift Aid: Taking Civil Society into the DigitalAge", by deputy director Asheem Singh, urges the creation of an on-line systemto enable charities to claim refunds electronically and calls for a new steeringgroup to work out a means of applying Gift Aid to new forms of donation such asvia mobile phone texts.

The report claims it is in society's long-term interest to encourage civilsociety. It was commissioned by the Charities Aid Foundation.