Umbrella bodies welcome increase in limits to Gift Aid Small Donations Scheme

But there is disappointment that the government did not bring forward the planned review of the scheme

Small donations
Small donations

Charity umbrella bodies have welcomed the increase in the limits to the Gift Aid Small Donations Scheme but have said they are disappointed that the government did not bring forward a review of the scheme.

In his Budget statement today, Chancellor George Osborne said that the limit for claims made under the Gift Aid Small Donations Scheme, which enables charities to claim a Gift-Aid like payment on small donations, would be increased from £5,000 to £8,000 a year from April 2016.

This means that charities will be able to claim up to £2,000 of payments from the government under the scheme each year; the limit was previously £1,250.

Osborne said in his speech that he expected 6,500 charities to make use of the increased limits.

Karl Wilding, director of public policy at the National Council for Voluntary Organisations, welcomed the increase but said that changing the upper limit did not address the complexity of the scheme, which was putting many organisations off claiming.

"Increasing the limit will not in itself mean that more charities will claim the money," he said. "I think it will mean that more money will go unclaimed."

For many smaller organisations that employ few or no staff, he said, it was not worth the administrative difficulties caused by trying to claim under the scheme.

Wilding said the government should instead have announced that it would bring forward a review of the scheme, which is scheduled to take place in 2016, with a view to making it easier for organisations to use it.

Andrew O’Brien, head of policy and public affairs at the Charity Finance Group, agreed that the review should be brought forward: "There is a review of the scheme that is due to take place next year, and I think the view in HM Revenue & Customs and the Treasury is ‘let’s just wait for that’."

Neil Cleeveley, chief executive of the local infrastructure body Navca, said: "The increase of the GASDS claim limit to £8,000 is welcome, but the joint letter to George Osborne I signed alongside the CFG, the NCVO and others stressed the importance of making the scheme less complicated. Unless the barriers to claiming are removed, the higher limit seems meaningless."

John Hemming, chair of the Charity Tax Group, said he thought the raised limit would increase awareness of the scheme, particularly among larger charities.

"The promised review of the scheme in 2016 needs to look at how the scheme works, particularly for small charities, for whom the eligibility requirements are too strict," he said. "But this increase demonstrates the government’s commitment to making it as effective as possible – we hope this positive approach will be carried forward in next year’s review."

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