Government has no plans to link Gift Aid Small Donations Scheme payments to inflation, MPs hear

By David Ainsworth, Third Sector Online, 5 November 2012

Sajid Javid

Sajid Javid

Sajid Javid, economic secretary to the Treasury, says it will monitor the scheme but annual small increases would 'add to the management pressures' on smaller charities

The government has no plans to increase the payments it makes under the Gift Aid Small Donations Scheme in line with inflation, MPs on the public bill committee examining its introduction heard last week.

The scheme will allow charities to claim a Gift Aid-like payment on £5,000 of cash donations of £20 or less each year without individual paperwork.

The Small Charitable Donations Bill, which will introduce the scheme, is at committee stage in the Commons.

Sajid Javid, the economic secretary to the Treasury and the minister responsible for taking the bill through the Commons, told the committee last week that the government would monitor the scheme over time and would have the power to increase both the £5,000 limit and the £20 limit if it chose to, although it would require the agreement of Parliament through the "affirmative procedure" – meaning both houses of Parliament would have to agree before it could be change.

"The government has no plans to link the figures to inflation," he said, in response to a question from Gareth Thomas, the shadow charities minister. "We will monitor the scheme over time, and if the limits need to be changed, they can be.

"It is also useful for many charities, and particularly smaller ones, to have a nice round number – £5,000 and £20 – that can be explained to volunteers and helpers, rather than numbers that by being linked to inflation would change by small amounts every year. That could add to the management pressures on smaller charities."

The committee also voted down proposals put forward by Thomas that the government should report on the bill each year giving the total expenditure of the scheme and the level of fraud, and carry out a review after two years.

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