Proposals to extend the Gift Aid Small Donation Scheme to cheques, text donations and online payments have been withdrawn during a parliamentary debate on the Small Charitable Donations and Childcare Payments Bill.
In the public bill committee stage of the bill’s passage through the House of Commons this morning, Jane Ellison, Financial Secretary to the Treasury, said an amendment by the Labour MP Rebecca Long-Bailey to extend the donation methods allowed in the GASDS was contrary to the intentions of the bill.
Long-Bailey’s amendment would have allowed cheques and "electronic communication", such as text and online donations, to be eligible under the GASDS, which allows charities and community sports clubs to claim Gift Aid-like payments on small donations of up to £8,000 a year.
These proposals have been backed by the Charity Finance Group, the National Council for Voluntary Organisations, the Institute of Fundraising and the Small Charities Coalition in their combined response to a government consultation on the GASDS, which closed earlier this year.
The bill already contains a proposal to extend the GASDS to contactless payments, which Ellison said was because of its similarity to forms of cash donation. It would also simplify the eligibility rules for the scheme.
Ellison said the GASDS was introduced to allow charities to receive Gift Aid-style top-ups when it was difficult to get Gift Aid declarations, not as "a lighter-touch alternative to Gift Aid", and to encourage charities to claim as much as possible under Gift Aid.
She said some of the forms of donation included in the amendment provided donors with the opportunity to make Gift Aid declarations if they wished, pointing out that the GASDS was specifically for occasions where donors did not have time to stop and provide details, such as putting money into a charity bucket.
When donating by text, for example, Ellison said that although the "motivation may be instantaneous", the donor has the ability to respond to a follow-up text about Gift Aid and had created a personal connection with the charity by providing their mobile phone number.
Susan Elan Jones, the Labour MP for Clwyd South, said it "doesn’t really make any sense" not to include cheques in the bill.
She said: "I cannot really see the sense that in one of our great abbeys, or churches or cultural buildings, that this scheme may be used for the euro, the dollar, the yen or whatever, but not the simple, humble cheque written in sterling."
Ellison said "our contention is that if the donor has time to stop and write a cheque, it is not unreasonable to suggest that he or she also complete a Gift Aid declaration".
Further debate on the bill will continue through the rest of today.