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Richard King

Posted 23 January 2017
by Richard King

Changes to the Gift Aid Small Donations Scheme to come into force from 6 April 2017

The Small Charitable Donations and Childcare Payments Act 2017 makes changes to the gift aid small donations scheme (GASDS), which will have effect from 6 April 2017.

Under Gift Aid charities are entitled to claim 25p tax on each £1 they receive from individual donations. Under the GASDS, which was introduced in 2013, Charities can claim relief similar to Gift Aid on small cash donations up to £8,000 each year without submitting paperwork for each individual donation, subject to eligibility rules.

The GASDS allows charities to claim a top-up payment on donations equivalent to Gift Aid without a declaration from the donor that they have paid the same amount or more in tax in that year, with the aim to help charities that collect small cash gifts in collecting tins or buckets, for example. Only cash donations of up to £20 may qualify for a top-up payment.

Changes to the GASDS include:

  1. Charities can now claim for small donations totalling more than £8,000 where they have more than one community building.
  1. Small donations made by contactless payment (but not cheques or text donations) are now covered by the GASDS.
  1. Charities – or groups of charities – may claim under either the main allowance or the community buildings allowance, but not both.
  1. In order to access the Scheme, charities no longer have to:
  • be registered for Gift Aid for at least the past two years.
  • have made successful Gift Aid claims in at least two of the previous four years.
  1. Donations received outside of the community building but within the same local authority area now qualify under the scheme.

This changes means that newer and smaller charities now have access to the Scheme, although it is disappointing that charities still have to claim £1 under Gift Aid for every £20 claimed under the GASDS.

For more information on charities law please see our charities solicitors section.

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About the author

Richard King

Richard King

Consultant Solicitor

A consultant solicitor in the charities & social enterprises team