Charities might have to read '100 pages of guidance' to use new Gift Aid scheme

Gareth Thomas, shadow minister for civil society, warns MPs that making claims under the planned Gift Aid Small Donations Scheme could be difficult for small charities

Gareth Thomas, the shadow charities minister, has criticised the scheme's requirements
Gareth Thomas, the shadow charities minister, has criticised the scheme's requirements

Charities that want to use the Gift Aid Small Donations Scheme could have to read almost 100 pages of guidance before they can do so, according to Gareth Thomas, the shadow charities minister.

Thomas was speaking in Parliament during the committee stage of the Small Charitable Donations Bill, which will introduce GASDS.

"There are 80 pages of guidance for a charity to claim Gift Aid," Thomas told fellow MPs on bill committee last week.

"Further guidance will be published by HM Revenue & Customs about the implementation of this scheme."

He said that this implied there would be "close to 100 pages of guidance for a charity to claim Gift Aid and a small top-up payment".

The small donations scheme will allow charities to claim £1,250 a year in Gift Aid-like payments on donations without an individual Gift Aid declaration. But to qualify, charities must have claimed Gift Aid for three of the past seven years, have a good record with HMRC, and have claimed £1 in Gift Aid for every £2 they want to claim through GASDS in a year.

Charity infrastructure bodies have said these requirements are too complex and should be scrapped.

Thomas said the bill had originally been intended to be easy and light on paperwork, but that it was now extremely difficult for small charities to use.

"The level of complexity makes it a sort of Franz Kafka memorial bill," he said.

Thomas said that part of the problem was the decision to have HMRC run the scheme, and to link it to Gift Aid.

"Some of the briefing for this bill suggested that this small grants scheme was needed to help charities that were not claiming Gift Aid," he said. "We are now in the daft position whereby charities that do not claim Gift Aid cannot benefit from the bill."

Thomas was speaking during discussion of a group of amendments aimed at exploring whether another body, such as the Charity Commission, could administer the scheme.

George Mudie, Labour MP for Leeds East, said he was concerned that "HMRC’s ethos is damaging to the direction in which the government wants to travel".

He said that asking HMRC to administer meant it had developed complex anti-fraud measures.

"The government is providing this scheme, which is expected to cost £100m," he said. "Because it has given it to HMRC to deal with, it is packed with all the worries and rules that HMRC comes with; they are part of its baggage," he said. "It is sheer silliness to give this light scheme to a department that comes with such detailed baggage."

But Sajid Javid, economic secretary to the Treasury and the minister in charge of steering the bill through the House of Commons, said that the scheme worked well as it stood.

"It will be an add-on to Gift Aid, which means that the costs of administration will be low for both charities and HMRC," he said. "Charities throughout the UK are already familiar with the Gift Aid rules and working with HMRC."

Javid said that while the actual rules might be complicated, the Church of England was confident that it could produce comprehensive guidance for its parishes which would fit onto a single page.

John Hemming, Liberal Democrat MP for Birmingham Yardley, told the committee that he thought HMRC should administer the scheme.

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