Changes to the Gift Aid Small Donations Scheme Effective 6 April 2017

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Under the Gift Aid Small Donations Scheme (GASDS), Charities and Community Amateur Sports Clubs (CASC’s) can claim an extra 25p for every £1 received on small cash donations of £20 or less without needing a Gift Aid declaration or establishing a link to the donor’s tax record. This was subject to a limit of £2,000 (being 25% of the maximum amount of £8,000 of donations from 6 April 2016).

A review of the scheme has taken place and the following changes take effect from 6 April 2017:

The requirements that

  • The organisation has been recognised as a charity “for tax purposes” or registered with HMRC as a CASC for at least two complete tax years; and
  • The organisation has made a successful  Gift Aid claim in at least two of the previous four tax years without a gap of two years between claims  or since the last claim made

have both been removed. These changes should make it easier for newly formed charities to access this scheme and it make it more attractive for smaller charities.

It is still the case that a penalty incurred by a charity in respect of a Gift Aid or GASDS claim will disqualify it from making a GASDS claim in the tax year in which the offending claim was made and the following tax year.

The claim limits still remain, so a charity can only claim a top up payment on small donations of the lower of 10 times the amount of its Gift Aid donations from that tax year or £8,000.

Where charities and CASC’s are connected (where the same persons or connected persons have control over them and their purposes and activities are the same or substantially similar) then they share the GASDS limit between them.

From 6 April 2017 donations made by contactless payment will also qualify under GASDS but cheque payments, debit and credit card, text message and bank transfers remain excluded as when these methods are used it should be more straightforward to get the donors details to obtain a Gift Aid declaration.

Conclusion:
The new rules are designed to simplify the GASDS and make it more accessible to more, particularly smaller charities. It is worth investigating if your charity can make a claim.

If you have any questions please give our Charities Team a call or drop them a line.

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